How the DSCR Calculator Works
The Debt Service Coverage Ratio (DSCR) measures whether a rental property's income covers the mortgage payment. The formula is simple: divide the property's gross monthly rent by the total monthly debt service (PITIA — Principal, Interest, Taxes, Insurance, and Association dues).
A DSCR of 1.0 means the rent exactly covers the payment. Above 1.0 means the property generates more income than it costs. Most lenders look for a DSCR of 1.25 or higher for the best rates, though many offer programs below 1.0 with adjusted terms.
DSCR Formula
DSCR = Monthly Rental Income ÷ Monthly PITIA Payment
What Lenders Look For
- 1.25+ — Excellent. Best rates and widest lender selection.
- 1.0 – 1.24 — Good. Most lenders will qualify you at competitive rates.
- 0.75 – 0.99 — Below breakeven. Available with higher rates and larger down payments.
- Below 0.75 — Limited options. May need to adjust the deal structure.