Calculate Debt Service Coverage Ratio for any rental property in seconds. Know if your deal clears the lender threshold before you ask.
Gross rent collected per month.
Taxes, insurance, maintenance, PM fees, vacancy — but NOT the mortgage P&I.
Principal and interest only — don't include taxes/insurance escrow (those are already in operating expenses).
DSCR
1.29x
Clears the typical lender threshold of 1.20. Comfortable cushion for vacancy spikes or unexpected repairs.
Lenders typically require DSCR ≥ 1.20
Annual NOI next to annual debt service. The dashed line is the NOI you'd need to clear a 1.20 DSCR — most lenders' minimum.
For informational purposes only. Computed from the data you provide; not investment, tax, or financial advice. Consult a qualified advisor before acting on any figure.
Keystone IQ computes DSCR live for every property — refreshed every page load — and alerts you when DSCR drifts toward a lender threshold. Pulls income, expenses, and mortgage P&I straight from your bank and mortgage servicer.
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Debt Service Coverage Ratio (DSCR) is a single number that tells you whether a rental property's income covers its mortgage payment. The formula is straightforward: divide net operating income (NOI) by annual debt service. NOI is your rent minus operating expenses — taxes, insurance, repairs, property-management fees, and a vacancy allowance. Annual debt service is your principal and interest payment × 12 (escrowed taxes and insurance are already in operating expenses, so they don't get double-counted).
A DSCR of 1.00 means the property exactly breaks even on its mortgage. 1.20 means there's a 20% cushion above what's needed to pay the loan. Lenders care about this ratio because it predicts whether the rental income alone will service the loan if the borrower hits a rough patch.
Most non-owner-occupied investment loans today are DSCR loans, which qualify the property rather than the borrower's W-2 income. The lender's underwriting decision turns on the DSCR number — typically requiring at least 1.20, sometimes 1.25 or 1.30 in tighter credit cycles. Below the threshold, the deal doesn't close (or closes with a larger required down payment to bring the ratio up).
For existing properties, DSCR tells you which assets are at risk if conditions shift. A property at 1.05 has almost no cushion — a single month of vacancy or a HVAC replacement can push it underwater. A property at 1.45 can absorb a bad month and keep paying its loan. Tracking DSCR over time, per property, surfaces problems before they become emergencies.
DSCR is also the right number for refi decisions. If rates have moved or the property's income has grown, a refi might unlock better terms — but only if the refi-adjusted DSCR still clears the lender's bar. The calculator above gives you a snapshot; tracking it monthly across your portfolio gives you a trend line.
Under 1.00, the property loses money on debt service alone — before you even count CapEx, surprise repairs, or your own time. Lenders won't touch it; you're effectively subsidizing the property out of personal income or other rental cash flow.
1.00 to 1.20 is "marginal" — technically positive, but with no margin for error. Most DSCR lenders decline this range without additional pricing or a stronger borrower profile.
1.20 to 1.50 is the healthy zone. Clears most lender thresholds and leaves enough cushion to weather a vacancy or major repair without missing a payment.
Above 1.50, you're in strong territory. Often qualifies for the best loan pricing, sometimes a higher LTV cap, and gives you flexibility to pull equity out via refi without dropping below thresholds.
Most lenders require DSCR ≥ 1.20 for a DSCR loan; the strongest pricing usually requires 1.25–1.40. From an investor's standpoint, 1.30+ gives you real cushion against vacancy and repair surprises. Anything under 1.20 is risky — even if you can qualify, you're one bad month from a missed payment.
LTV (loan-to-value) measures how much you've borrowed relative to the property's value — a balance-sheet metric. DSCR measures how comfortably the property's income covers the loan — a cash-flow metric. Lenders look at both: LTV protects them from declining property values, DSCR protects them from declining rental income. You can have a healthy LTV (say 60%) and a terrible DSCR (0.90) if rents in the area have dropped, or vice versa.
Yes — operating expenses should include taxes, insurance, maintenance, property management, utilities you pay, HOA dues, and a realistic vacancy allowance (typically 5–8% of gross rent). Do NOT include taxes/insurance again in the P&I field if your lender escrows them — the P&I field is principal and interest only. Double-counting escrow makes DSCR look worse than it is.
The 0.20 buffer above 1.00 covers normal noise in rental income and operating expenses — a month of vacancy, a surprise repair, an insurance premium increase. At exactly 1.00, the property is one unexpected expense away from missing a payment. The 1.20 floor protects the lender from foreclosing on a property that was technically cash-flow-positive on paper but couldn't survive real-world variance.
Three real levers: raise rents (if you're under market — use the gap to negotiate at renewal), cut expenses (audit your insurance, property management, and vendor pricing for line items running hot), or refinance into a longer amortization to drop the monthly P&I. Adding capital to pay down the mortgage works too but is the slowest path. Avoid the temptation to underreport expenses to hit the threshold — lenders verify operating statements and the deal falls apart at underwriting.
No — DSCR is a cash-flow ratio, not a long-term sustainability ratio. CapEx (roof replacement, HVAC, repaving) is a capital expenditure that gets reserved against separately. A healthy DSCR doesn't mean you can ignore CapEx; budget 5–10% of gross rent annually as a reserve and treat it as a non-negotiable line item even though it doesn't appear in the DSCR formula.
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