Variables and units
Net Operating Income
Income after operating expenses.
currency
Annual Debt Service
Total annual loan payments.
currency
Real Estate · Loan
Debt Service Coverage Ratio
Included with every planRun any calculator free during your 14-day trial. Subscribe to save deals, export one-click PDF reports, and keep your full project history.
Run any calculator free during your 14-day trial. Subscribe to save results, export branded reports, and sync across web and mobile. Billing via PayPal.
Use DSCR to test whether income comfortably covers scheduled loan payments.
Browse all calculatorsInteractive workbench
Lender coverage screen
Net Operating IncomeAnnual Debt Service
The property produces 1.50 times the annual debt service.
Common mistakes
- Using monthly debt service against annual NOI.
- Treating DSCR as a percentage.
Step-by-step example
Lender coverage screen
1. Start with the example inputs
- Net Operating Income$150,000
- Annual Debt Service$100,000
2. Apply the formula
Net Operating IncomeAnnual Debt Service3. Run the numbers
1.5
The property produces 1.50 times the annual debt service.
What this result means
A DSCR of 1.5 shows how many times the property's net operating income covers its annual loan payments. Above 1.0 means the property pays its own debt; below 1.0 means you fund the shortfall. Many commercial lenders look for roughly 1.20–1.25 or better before approving a loan, so this single number often decides financing.