DSCR calculator
Measure how comfortably a property's net operating income covers its annual principal-and-interest payments. Set a target ratio to see the required NOI and the debt service the property can support.
Debt service is annual mortgage principal plus interest. Do not include debt service inside operating expenses.
€22,500 NOI ÷ €15,000 annual debt service = 1.50×
€3,750 above the NOI required for a 1.25× target.
Estimates only, not lending or investment advice. Lenders define income, reserves, and eligible expenses differently; confirm their underwriting method.
How to use it
- 1Enter scheduled rent, other recurring income, vacancy, and operating expenses.
- 2Add annual principal-and-interest debt service and the lender's target ratio.
- 3Compare actual DSCR with the target NOI and maximum supported debt service.
How to use the result
Use NOI, not cash flow
DSCR divides net operating income by annual debt service. NOI is calculated before financing and capital expenditure; debt service includes the principal and interest due during the year. Keeping those definitions separate prevents double subtraction.
Treat the target as a buffer
A ratio of 1.00 means NOI only equals the scheduled debt payment, leaving no operating cushion. Many underwriting scenarios use a higher threshold, but the required target depends on lender policy, property type, market, and borrower.
Guides and workflows for the result
Use the calculation as a starting point, then examine the assumptions and carry the result into the matching PropFlow workflow.
Questions
- What is DSCR?
- Debt service coverage ratio is annual net operating income divided by annual debt service. A 1.25× DSCR means the property produces €1.25 of NOI for each €1.00 of scheduled principal and interest.
- What is a good DSCR for a rental property?
- There is no universal threshold. A ratio above 1.00 indicates NOI exceeds debt service, while many lenders seek an additional cushion. Use the actual target supplied by the lender evaluating the property.
- What belongs in annual debt service?
- Include the principal and interest payments due over the year for the loan being tested. Do not include property operating expenses there, because those have already been subtracted when calculating NOI.