DSCR Coverage Calculator: Choose the Definition
Choose operating-income or accepted-rent coverage. Compare the selected ratio, payment budget and hypothetical loan principal without implying approval.
What This Calculator Does
Compare a rental property's income and payment under an explicit coverage definition. One model uses net operating income divided by loan principal and interest; the other uses supplied lender-accepted rent divided by principal, interest and classified housing costs. The selected target and note terms produce a hypothetical coverage-only principal limit, not an approved loan or a universal lender rule.
Who Is This For
For property investors and real-estate professionals comparing a defined coverage scenario with lender-supplied rent, cost classifications and terms. Confirm the applicable program outside the calculator; borrower eligibility, property value, leverage and reserves remain separate requirements.
How It Works
Choose the method. For the NOI method, enter scheduled rent, vacancy and all operating expenses. For the PITIA method, enter the rent your lender accepts and, separately, taxes, required insurance and HOA. Then enter the loan amount, a fixed yearly rate, the term and a target such as 1.35. The rate and term are needed even with loan 0, to estimate the largest supported loan. Tick the confirmation, then compare the result with your target, the payment the income supports (which can be negative) and the largest supported loan.
Frequently Asked Questions
Why choose a coverage definition before entering rent?
The NOI method subtracts vacancy and operating costs from scheduled rent, then divides by principal and interest only. The PITIA method takes the rent your lender already accepts for qualifying and divides it by principal and interest plus taxes, insurance and HOA. They divide different amounts by different amounts. Scheduled, collected and lender-accepted rent are not interchangeable; switching methods doesn't make a rent lender-accepted or turn operating expenses into housing costs.
Can the same supplied numbers meet one target and miss another?
Yes. Example: scheduled rent $4,000, vacancy 5%, operating costs $900 and a $320,000 loan at an assumed 7% over 30 years give operating income of $2,900 and principal and interest of about $2,128.97: a DSCR of about 1.3622×, which meets a 1.35× target. A program that accepts $4,000 of rent with $900 of actual taxes, insurance and HOA divides by $3,028.97 instead, giving about 1.3206×, below 1.35×. The largest loans the income supports are about $322,882.92 and $310,078.95. Neither result approves financing.
Does the accepted-rent model infer a lender's haircut or rent choice?
No. Supply the monthly qualifying rent accepted for that program. The calculator does not choose a lease versus appraisal, apply an undocumented program reduction or decide eligibility. It does not deduct vacancy again from that accepted amount. Operating-income mode instead uses gross scheduled rent with an explicit vacancy/collection allowance. Each definition retains its own rent basis; do not copy a net or gross figure into the other without confirmation.
Which costs belong in the full housing payment?
The separate bucket contains the program's documented monthly taxes, required insurance and association/assessment amounts, excluding the principal/interest already modeled. Repairs, management and arbitrary operating totals are not automatically part of it. Operating-income mode uses complete expenses under the externally confirmed NOI convention and no separate housing bucket. Inactive fields are not applicable, not confirmed zero. Count each cost once and confirm the lender's classifications.
What happens when the comparison loan is zero?
Then principal and interest are 0. With the NOI method there is nothing to divide by, so no DSCR is shown, but the largest supported loan can still be positive. With the PITIA method a DSCR can still appear if other housing costs are positive: $4,000 of accepted rent and $900 of costs give about 4.4444× with loan 0. If those costs are 0 too, no DSCR is shown. The rate and term stay required because the largest supported loan is still calculated. None of this means a cash purchase or approval.
Can a met target still leave no positive new loan budget?
Yes. Accepted rent $1,250, fixed housing costs $1,000, loan 0 and target 1.25× give a DSCR of exactly 1.25×. The payment the income supports is $1,250/1.25−$1,000=0, so the largest supported loan is 0. With accepted rent $1,000, fixed costs $1,500 and target 1.25×, the supported payment is −$700; it stays visible, and the largest loan is 0 because costs use up the income. Operating income of zero or less also supports no loan. These are example scenarios, not program quotes.
What does the target or hypothetical principal limit mean?
The target is a ratio, not a percentage: 1.35 means income is 1.35 times the payment. The 0.8–2 range is a form limit, not a law or lender standard. A target below 1 allows loan payments larger than the income. The payment the income supports is income ÷ target, minus fixed housing costs where they apply; a positive amount is turned into a loan amount at your rate and term. The result looks only at coverage, not property value, loan-to-value, credit, reserves, down payment or program loan limits. Field limits don't cap the results.
How do precision and loan assumptions affect the result?
Amounts keep cents; vacancy, rate and target allow four decimal places. The target check, the supported payment and the largest loan use exact payments, not a lender's rounded statement. A DSCR shown as 1.35× doesn't meet 1.35× if the exact value is 1.34999. Yearly income and payments are both monthly amounts × 12, so the ratio is not a yearly return or a projection over time. Only standard fixed-rate loans are modeled; the note rate is not the APR or a market quote. Income taxes and investment return are not included.