Signature Tool
DSCR calculator
Rent ÷ PITIA, the way DSCR lenders actually underwrite it. Enter the property's income and carrying costs, and either the quoted payment or the loan terms — get the coverage ratio and where it lands on a lender's grid.
Property income & costs
Gross monthly rent or gross monthly income the property produces.
Proposed loan payment
Computed principal & interest: $1,678.11 / mo (standard amortization; interest-only structures score higher — see notes below).
Debt-service coverage ratio
The property covers its debt, but with little cushion. Financeable, usually at a price.
- Monthly rent
- $2,400
- Monthly PITIA
- $2,094.78
- Break-even rent (1.00×)
- $2,094.78
- Max PITIA for 1.25×
- $1,920.00
PITIA breakdown
- Principal & interest
- $1,678.11
- Property taxes (/mo)
- $300.00
- Insurance (/mo)
- $116.67
- HOA dues
- $0.00
- Total PITIA
- $2,094.78
How lenders view this
How lenders view this: many DSCR lenders will still close between 1.00 and 1.25, but expect a rate add-on (often 0.25%–1.00%), a lower maximum LTV, or a larger reserve requirement. A modestly larger down payment or a longer amortization often pushes the ratio back over 1.25.
Illustrative estimate for research only — not a quote, prequalification, or commitment to lend. Lenders differ on the exact formula: some use in-place lease rent, some the appraiser's market-rent figure (Form 1007), some the lower of the two; short-term rental programs may haircut projected revenue. Confirm the lender's own DSCR definition before you rely on a ratio.
What DSCR actually measures
Debt-Service Coverage Ratio is the property's gross monthly rent divided by its full monthly housing obligation — PITIA: Principal, Interest, Taxes, Insurance, and Association dues. A DSCR of 1.20 means the rent covers the payment 1.2 times over. DSCR lenders qualify the property on this number instead of qualifying you on tax returns and DTI — which is why the product exists for investors whose paper income understates their real position.
The bands lenders price against
- 1.25 and above — strong. The conventional clean-approval threshold across most published DSCR matrices. Best rate tiers, widest program menu, and often the highest allowed LTV.
- 1.00 to 1.25 — marginal. Financeable at many lenders, but priced: expect rate add-ons, LTV caps, or bigger reserve requirements. Small structural changes (longer amortization, slightly more down) often clear 1.25.
- Below 1.00 — most lenders decline or price up hard. The property doesn't cover its own debt. Sub-1.0 and “no-ratio” programs exist but are expensive, low-leverage exceptions, not a plan.
Details that move the ratio
- Which rent counts. Lenders use the in-place lease, the appraiser's market rent (Form 1007/1025), or the lower of the two. Short-term rental programs that accept projected revenue usually apply a haircut (commonly 10–25%).
- Interest-only periods. Programs that qualify on the IO payment produce a higher DSCR from the same deal — read whether the lender qualifies on IO or the fully amortizing payment.
- Taxes and insurance are not fixed. Reassessment after purchase and hardening insurance markets (coastal and hail states especially) can push a 1.30 at closing under 1.20 a year later. Underwrite your own forward numbers, not the seller's trailing ones.
- DSCR is a lender screen, not a return metric. It ignores vacancy, maintenance, capex, and management. A deal can clear 1.25 and still be a poor investment — coverage is the floor, not the thesis.
Scope note. DSCR loans are business-purpose credit secured by non-owner-occupied investment property. That framing matters legally: business-purpose loans sit outside most consumer-mortgage rules (TILA/RESPA disclosures, ability-to-repay), which is why lenders certify occupancy and purpose at closing. Keystone Rate covers business-purpose financing only and publishes research, not advice — confirm program terms with the lender.