DSCR Calculator
Find the largest loan a property's income can support. Lenders often test two limits: a debt service coverage ratio, or DSCR, and a loan-to-value limit, or LTV. This page works out both and keeps the smaller one.
- Free
- Works offline after your first visit
- Saves on this device
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- Updated
How it works
DSCR is income divided by yearly loan payments. For a given DSCR, the income can carry a set amount of yearly payments. Dividing that by the yearly payments on one unit of loan, worked out from the rate and years, gives the largest loan the income supports.
The LTV limit is the property value times the loan-to-value percent. The largest loan is the smaller of the two limits. Lenders may use other tests and set different limits.
Worked example
A property with $120,000.00 a year in net operating income, a DSCR limit of 1.25 and a loan-to-value limit of 75% on a value of $2,000,000.00, supports a loan of up to $1,184,821.56 at 6.5% over 25 years.
Questions
What is DSCR?
Debt service coverage ratio. It is the property's income divided by its yearly loan payments. A higher number leaves more room to cover the payments.
What DSCR do lenders want?
Each lender sets its own minimum, and minimums change over time. Ask a lender which number applies to your loan.
Which income should I enter?
Use net operating income: rent after running costs such as taxes, insurance and repairs, but before loan payments.
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