Debt Service Coverage Ratio Calculator
The Debt Service Coverage Ratio or DSCR is used by bank loan officials for the online computation of income property loans. DSCR of at least 1.2 is required by most lenders.
A DSCR of 1.0 is called break even. A DSCR below 1.0 denotes a net operating loss on the basis of the debt amount. DSCR above 1.0 indicates that the property is bankable enough to pay the debt obligations.
The following formula is used for calculating the debt service coverage ratio:
DSCR = Net Operating Income/Total Debt Service
DSCR = (Monthly Net Income)/ (Monthly Principal and Interest Payment on Loan)