How is the ratio calculated?
DSCR stands for debt service coverage ratio. Take the monthly rent the lender will count and divide it by the full monthly payment: principal, interest, taxes, insurance and any association dues. The answer is your ratio. Try your own numbers below; nothing you type leaves this page.
PUT THE NUMBERS TO WORK
Your DSCR, explored.
Estimate coverage for a long-term rental, then see what rent or loan amount would reach your planning target.
Fixed payment · Long-term rental
Figures stay in this browser tab. No contact details needed.
Rental coverage
Live estimate1.00× means rent equals the estimated payment.
Complete your loan details to compare them with your planning target.
View the payment breakdown
- Principal & interest
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- Property taxes
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- Property insurance
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- Association dues
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- Flood insurance
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Vacancy, maintenance, management, repairs and other operating costs are not deducted from the rent-minus-payment figure.
Complete the inputs to see an estimate.
Ratio shown to two decimals. Coverage uses the unrounded calculation.
EXPLORE A DIFFERENT RATIO
What would reach your target?
See the rent or loan amount needed for your target. Each estimate changes one input and keeps the others the same.
Rent at your target
—Enter a complete scenario and target.
Keep the same loan and costs. Any higher rent still needs acceptable evidence.
Loan amount at your target
—Enter a complete scenario and target.
Keep the same rent, rate, repayment period and costs. This does not check property value, borrowing limits or eligibility.
A stronger ratio can affect pricing. The selected program determines whether it does.
How coverage affects pricingHow this estimate works
This estimate divides your monthly rent by an estimated monthly property payment. The payment includes principal (the amount borrowed), interest, property taxes, property insurance, association dues and separate flood insurance. Yearly tax and insurance figures are divided by 12. Include any other required property coverage in insurance, without counting flood coverage twice.
The estimate uses your interest rate assumption and repayment period. At a 0% rate, the amount borrowed is divided by the number of monthly payments. It does not model interest-only loans, different rates used for qualification, points, fees or loans with a large balance due at the end (a balloon payment).
The rent target is the estimated payment multiplied by your target ratio. For the loan target, we divide rent by your target and subtract taxes, insurance and dues. The remaining payment supports the loan amount shown at the same rate and repayment period. Rent rounds up to cents; the loan amount rounds down to cents. Neither result is an approval or a maximum eligible loan.
A lender may use different rent records, payment costs or a different rate in its qualification calculation. A higher DSCR does not change the interest rate you entered here. Your entries stay in this tab, are not saved and are not sent into a rate quote.
Educational estimate only. Not a rate quote, offer, approval or underwriting determination.
An example, with made-up numbers.
Monthly rent the lender counts
$3,000Full monthly payment
$2,400Three thousand divided by twenty-four hundred is 1.25: a dollar and a quarter of rent for every dollar of payment. A math example, not a Lendwise minimum or pricing tier.
What counts as rent, and what counts as the payment?
This is where most surprises live. The rent the lender counts is often not the rent you expect to collect, and the payment includes more than principal and interest.
- On a purchase, the appraiser estimates the market rent on a standard rent schedule, and that estimate is the rent the lender counts.
- On a refinance, several programs count the lower of your current lease and the appraiser's market rent.
- Short-term rental income is its own case; the short-term rental article explains how it is counted.
- The payment is principal, interest, taxes, insurance and association dues; on an interest-only loan some programs test the interest-only payment with taxes, insurance and dues.
Checked by underwriting, as of November 2026.
Two lenders can look at the same property and reach different ratios. That is not a trick. It is a reason to ask early which rent and which payment a program uses.
So what counts as good?
One is the line. At a ratio of one the property pays for itself on paper, and most programs want to see at least that. Above one you have room: room for a vacant month, room for a repair, and room in the lender's eyes, which shows up as more programs willing to take the file and often a better price.
A minimum ratio of 1.00 is the standard across the programs we use. One program asks for 1.10 on multifamily and mixed-use property. Interest-only loans must still cover 1.00 on the programs that offer them. A stronger ratio can improve the terms; the program decides how much.
Checked by underwriting, as of November 2026.
My own rule is simple. I like a rental that clears the payment with a quarter to spare, a ratio of one and a quarter or better, because that is the property that survives a bad year without a phone call to the lender. Anything close to one works on paper. It is the ones below one I steer people away from.
Can I get a DSCR loan below 1.00?
Sometimes. A handful of programs lend when the rent falls short, and a few do not look at the ratio at all. Both ask for more money down and charge more for the risk, because fewer investors buy loans like these.
| Ratio | What usually changes |
|---|---|
| 1.00 and up | Full leverage for your credit score |
| 0.75 to 0.99 | More money down, higher price, fewer programs |
| No ratio, below 0.75 | Lowest leverage, highest price, few programs; cash-out capped near 65% |
A ratio below one means you are feeding the property every month. Sometimes that is a plan, for a property that will rent higher after work is done. Usually it is a warning, and the extra cost of the loan makes the warning louder.
What moves the ratio?
- A larger down payment lowers the payment and lifts the ratio.
- A longer repayment period, or an interest-only period, lowers the payment too, on programs that offer them.
- Taxes, insurance and association dues count against you, so a property that is cheaper to carry scores better.
- The rent the lender counts may be less than the rent you expect, so the appraisal matters as much as the lease.
- Rate matters: a lower rate lowers the payment, which is why the ratio and the price move together.
What moves a DSCR rate?
The ratio is one of several dials. Your credit score, the size of the down payment, whether you take cash out, the property type and whether you accept a prepayment penalty all move the price. A stronger ratio often helps, but it does not reduce the rate on its own, and no single dial decides it. For saved examples with their dates, see the DSCR rates page.
The downsides article explains why these loans cost more than a loan on your own home, and the requirements article lists what else the lender checks.
Is this the same DSCR that commercial lenders use?
Same idea, different ingredients. In commercial lending the ratio divides a building's net operating income, after expenses, by its annual debt payments. In rental-property lending it divides gross rent by the monthly payment, with no expenses taken out. That is why a commercial ratio and a DSCR-loan ratio on the same building are not the same number, and why a DSCR loan ratio of one leaves no room for the costs of running the property.
Sources and important context
Educational content, not an offer, approval or rate quote. The DSCR loans described here are business-purpose loans for rental property you will not live in. Every range describes the programs Lendwise uses on the date shown, never a promise for your file. Calculator results are estimates, not program requirements or pricing tiers.