DSCR calculator for commercial real estate loans
Calculate debt service coverage ratio from net operating income and annual debt service, with the cash-flow cushion shown alongside the result.
Debt service coverage ratio
- Annual NOI
- $750,000.00
- Annual debt service
- $600,000.00
- Cash-flow cushion
- $150,000.00
Use this educational result as a screening or reasonableness check. Lenders may define NOI, debt service and minimum DSCR differently in their credit documents and policies.
Calculation boundaries
Assumptions behind this estimate
Transparent assumptions make it easier to identify where a contractual or production calculation may differ.
- DSCR equals annual net operating income divided by annual debt service.
- Net operating income and debt service use the same annual measurement period.
- The calculation does not adjust for reserves, capital expenditure, vacancy stress or lender-defined underwriting changes.
- A ratio above 1.00x means entered NOI exceeds entered debt service; it does not establish credit approval.
Common questions
Calculator FAQ
What is DSCR in commercial real estate lending?OpenClose
Debt service coverage ratio compares eligible property cash flow with required debt service. It helps indicate how much operating income is available to cover loan payments.
How is DSCR calculated?OpenClose
A basic calculation divides annual net operating income by annual debt service. The lender or agreement controls the exact definitions and any underwriting adjustments.
What is a good DSCR?OpenClose
There is no universal threshold. Requirements vary by lender, property type, leverage, market, transaction and covenant terms.