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Finance Calc Kit
Real estate

Debt Service Coverage Ratio Calculator

Calculate the Debt Service Coverage Ratio (DSCR) for real estate properties. Solve for DSCR, net operating income, or annual debt service with instant results.

Solve for

$
$

Debt service coverage ratio

1.25x

Lender benchmark

Healthy: Meets the typical 1.25 lender minimum.

DSCR calculation details

Open to see how the selected variable is derived from your inputs.

  1. Given values

    Annual NOI = $120,000.00, annual debt service = $96,000.00.

  2. Apply DSCR formula

    DSCR=Annual NOIAnnual Debt Service\text{DSCR} = \frac{\text{Annual NOI}}{\text{Annual Debt Service}}

    Divide net operating income by annual debt service.

  3. Substitute and calculate

    120,00096,000=1.2500\frac{120,000}{96,000} = 1.2500

    $120,000.00 / $96,000.00 = 1.2500x.

Report tool

What is the debt service coverage ratio (DSCR)?

The debt service coverage ratio (DSCR), also called the debt coverage ratio (DCR), measures whether property net operating income (NOI) is large enough to cover annual debt service. Lenders use DSCR to size commercial real estate loans. This calculator solves for DSCR, required NOI, or maximum debt service. All math runs in your browser.

NOI is operating revenue minus operating expenses before debt payments. If you are sizing a mortgage payment first, try the mortgage calculator with taxes and insurance. For a broader fixed-charge view that includes leases, open the fixed charge coverage ratio calculator. To stress-test loan payoff timing, use the mortgage acceleration calculator.

DSCR formula

DSCR=Annual Net Operating IncomeAnnual Debt Service\text{DSCR} = \frac{\text{Annual Net Operating Income}}{\text{Annual Debt Service}}

Annual debt service is the total of principal and interest paid on the loan in one year. Many lenders want at least 1.25x for stabilized commercial property. The SBA often cites 1.15x as a minimum for certain 7(a) loans.

Worked example: $120,000 NOI, $96,000 debt service

  1. Annual NOI: $120,000
  2. Annual debt service: $96,000
  3. DSCR: $120,000 / $96,000 = 1.25x

A 1.25x ratio means NOI exceeds debt service by 25%, a common lender benchmark. Switch the solve mode to find the NOI needed for a target DSCR or the maximum debt service your NOI can support.

Frequently asked questions

What is a good DSCR for commercial real estate?
Many lenders target at least 1.25x for stabilized assets. Ratios below 1.0x mean NOI does not fully cover debt service.
What counts as annual debt service?
Use total scheduled principal plus interest payments over 12 months. Include all loans secured by the property.
How is NOI different from net income?
NOI is property-level operating profit before debt service, depreciation, and income taxes. It focuses on recurring rental operations.
Can I solve for required NOI instead of DSCR?
Yes. Select the required NOI mode and enter your target DSCR and annual debt service. The tool multiplies the two inputs.
Are the results stored?
No. Inputs sync to the page URL for sharing, but nothing is saved on a server.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.