DSCR Calculator

DSCR (debt service coverage ratio) is how rental lenders size a loan on the property’s income instead of your personal income. Enter the rent and the loan, and see your ratio and the rent you would need to reach a target.

How to calculate DSCR

DSCR = monthly rent ÷ monthly PITIA, where PITIA is principal and interest plus property taxes, insurance and any HOA dues. A DSCR of 1.00 means the rent exactly covers the payment. Above 1.00, the rent covers it with room to spare. Some lenders calculate DSCR with net operating income instead of gross rent; this calculator uses gross rent and shows your cash flow after vacancy, management and reserves separately.

Worked example

A $300,000 rental with a 75% loan ($225,000) at 7.5% over 30 years has principal and interest of about $1,573 a month. Add $250 of taxes and $125 of insurance and PITIA is about $1,948. At $2,400 a month in rent, the DSCR is 1.23. To reach 1.25, the rent would need to be about $2,435.

These figures are example assumptions for discussion purposes only. They are not a Ternus quote or a commitment to lend, and any loan is subject to underwriting, valuation and final approval.

DSCR questions

What is a good DSCR for a rental loan?

Each lender sets its own minimum, and it often moves with leverage, credit and property type. The higher your DSCR, the more room you have. A Ternus Account Executive can tell you where your deal lands.

How can I raise my DSCR?

Raise the rent, lower the loan amount, or lower the payment with a different rate or term. Use the calculator to see which lever moves the ratio most on your deal.

Ternus makes DSCR rental loans to investors. Price your rental loan in the Loan Sizer or run the BRRRR calculator.