DSCR Coverage Calculator
Evaluate Debt Service Coverage Ratio (Net Operating Income / Total Debt Service) for commercial mortgages, real estate portfolios, and business loans.
Healthy DSCR of 1.50x
Net Operating Income exceeds debt service by $50,000 per year. Meets standard commercial bank lending approval benchmarks.
Debt vs Cash Margin
5-Year Projection Trend
Net Operating Income vs Debt Service over time
Year-by-Year Coverage Schedule
| Year | Net Operating Income | Annual Debt Service | DSCR Ratio | Net Cash Surplus |
|---|
What is a Good DSCR?
Most commercial lenders require a minimum DSCR of 1.20x to 1.25x. A ratio above 1.25x proves the property generates enough buffer to absorb vacancies or rising operating expenses.
DSCR Loan Approval
DSCR loans assess property cash flow rather than personal tax returns or W-2 income. Higher DSCR ratios qualify borrowers for lower interest rates and higher loan-to-value (LTV) limits.
How to Improve DSCR
Boost DSCR by increasing rental rates, minimizing vacancy rates, reducing operating overhead, or putting down a larger initial equity deposit to lower monthly debt service payments.