What does this calculator do?
The debt-service coverage ratio compares operating income with scheduled debt payments. A ratio of 1.00 means those modeled amounts are equal. At 1.33, each dollar of annual debt service has about $1.33 of NOI behind it. The target calculation shows how much annual debt service the input NOI would support at your selected ratio, before any other underwriting constraints.
How to use it
- Confirm whether you need an NOI-based property ratio or another lender-specific method.
- Use annual NOI and annual principal-plus-interest debt service on the same basis.
- Enter the lender’s target if you have one, then stress-test lower income or higher expenses.
The math, made clear
DSCR = annual NOI ÷ annual debt service; debt capacity at target = annual NOI ÷ target DSCRA worked example
$24,000 annual NOI divided by $18,000 debt service gives 1.33× DSCR. At a selected target of 1.25×, the NOI supports $19,200 in annual debt service under this simplified method.
What to keep in mind
Lenders may use adjusted NOI, include reserves, or use rent divided by PITIA for certain residential products. This tool uses only NOI divided by principal-and-interest debt service. It does not establish loan eligibility, loan size, or approval. Target capacity is shown as zero when NOI is not positive.
All default values are illustrative. Results are rounded for display; calculations use full precision except where a split must allocate exact cents. Read our methodology for shared definitions and report a calculation issue if a result looks wrong.