How to Use This Calculator
Enter the property's purchase price, expected rent, and monthly expenses. The calculator instantly shows your DSCR ratio, which rate tier you qualify for, and the maximum loan amount at each threshold. Use the rate tier table to see exactly what rent or price adjustment would move you into a better tier.
Calculator
DSCR Loan Qualifier
Check if your deal meets DSCR lender thresholds before applying.
Property & Loan
Rental Income
Monthly Expenses
DSCR Rate Tiers
| DSCR | Tier | Expected Rate | Rent Needed | Max Loan |
|---|---|---|---|---|
| 1.25x | Premium | 7.0 - 7.5% | $2,429 | $198,795 |
| 1.20x | Standard | 7.5 - 8.0% | $2,332 | $209,282 |
| 1.00x | Minimum | 8.0 - 9.0% | $1,943 | $261,722 |
DSCR Ratio
1.13x
Minimum - Higher rates (8.0-9.0%)
Cash Flow
Loan Details
What is DSCR and Why Does it Matter?
DSCR (Debt Service Coverage Ratio) measures whether a rental property generates enough income to cover its debt payments. It is the single most important number for DSCR loan qualification. A DSCR of 1.0x means the property breaks even. Above 1.0x, it generates positive cash flow. Below 1.0x, you are paying out of pocket each month.
Unlike conventional mortgages that look at your personal income and tax returns, DSCR lenders care only about the property. This makes DSCR loans the go-to financing for real estate investors who are self-employed, have complex tax situations, or have maxed out their conventional mortgage limit (typically 10 properties).
DSCR Rate Tiers
Premium Tier
1.25x+
Best rates (7.0-7.5%). Lenders compete for these deals. Easiest approval with lowest fees.
Standard Tier
1.20x
Standard rates (7.5-8.0%). Most DSCR loans fall in this range. Straightforward qualification.
Minimum Tier
1.00x
Higher rates (8.0-9.0%). Break-even coverage. Expect lower LTV caps and more reserves required.
How to Improve Your DSCR
- Increase rent: Even a small rent increase moves the DSCR needle significantly. Adding amenities like in-unit laundry, pet-friendliness, or covered parking can justify higher rents.
- Larger down payment: A bigger down payment reduces the loan amount, which lowers PITIA and improves DSCR. Going from 20% to 25% down can move you from 1.15x to 1.25x.
- Lower expenses: Shop insurance quotes aggressively. Appeal your property tax assessment if it seems high. Every dollar you save on PITIA improves your ratio.
- Buy at a lower price: Negotiating the purchase price down directly improves every metric including DSCR.
DSCR vs conventional
Frequently Asked Questions
What is a DSCR loan?
What DSCR do I need to qualify?
How is DSCR calculated?
What are typical DSCR loan terms?
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