Property DSCR Calculator
Calculate real estate debt service coverage ratio, NOI surplus and required NOI for a target DSCR.
Calculate property DSCR
Calculate debt service coverage ratio from net operating income and annual debt service.
How the Property DSCR Calculator works
Debt Service Coverage Ratio compares property net operating income with annual debt service. Freddie Mac defines debt coverage as NOI divided by annual debt service for multifamily property. A ratio of 1.00 means NOI equals scheduled debt service; above 1.00 indicates an income cushion before other non-NOI items.
How to use this property dscr calculator
Enter the annual NOI using the lender or underwriting definition relevant to the property, then enter total annual principal and interest or other debt-service amount included by that definition. Add a target DSCR to see the NOI required to meet it and the current dollar headroom above or below that target.
How to interpret the result
DSCR is a coverage metric, not a profitability measure. For example, 1.25× means NOI is 125% of annual debt service under the entered assumptions. The dollar headroom result is often more intuitive for sensitivity analysis because it shows how much NOI could fall before the selected target is missed.
Assumptions and limitations
Lenders may normalize rents, vacancy, management fees, reserves, replacement costs or other NOI components differently. They may also include debt obligations beyond the simple mortgage payment. Minimum DSCR varies by program and risk. Therefore, do not use this tool as a loan-approval predictor or substitute for a lender term sheet.
Practical example and workflow
With 900,000 of annual NOI and 650,000 of debt service, DSCR is about 1.385×. Against a 1.25× target, required NOI is 812,500, leaving 87,500 of headroom. An underwriter can then stress rent or expense assumptions to see how quickly that cushion disappears.