Calculate the debt service coverage ratio that lenders use to assess investment property loans, and check whether you meet a given threshold.
Rental income minus operating expenses, before debt.
Total yearly mortgage principal and interest.
Lender threshold
Meets minimum
Many commercial and investment lenders look for 1.20 to 1.25 or higher, meaning income comfortably exceeds debt payments.
The property does not generate enough income to cover its debt payments, so you would need to fund the shortfall from other sources.
Master Debt Service Coverage Ratio (DSCR) for real estate investing. Learn the DSCR formula, lender underwriting thresholds, 3 worked numerical examples, and 5 levers to improve loan coverage across USA, UK, Canada, Aust
Longer leases, tougher financing, and tenant-dependent income. Commercial property rewards preparation and punishes assumptions.
Disclaimer: This calculator provides estimates for informational purposes only and is not financial, tax, or legal advice. Verify figures with a qualified professional before making decisions.
