DSCR loan calculator
Enter price, rent, and rate to see your Debt Service Coverage Ratio and whether it clears the 1.2 minimum most lenders want. Most deals fall short at today’s rates, so the number that matters is how far yours is from 1.2.
Assumptions: 25% down + 3% closing costs, 40% opex/vacancy load 30-year amortization. Lenders typically require DSCR ≥ 1.2. Estimates, not a quote.
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A worked example
Here is the starting deal above, a $300,000 property renting for $2,000 a month at a 7.75% DSCR loan rate with 25% down. Walking the numbers shows why coverage is tight.
| Step | Value | How it is found |
|---|---|---|
| Gross annual rent | $24,000 | $2,000 rent times 12 |
| Net operating income | $14,400 | Rent minus a 40% expense load |
| Loan amount | $225,000 | Price minus 25% down |
| Annual debt service | $19,343 | Monthly P&I of $1,612 times 12 |
| DSCR | 0.74 | NOI divided by debt service |
How real metros score right now
These are live Zillow median prices and rents, run through the same 25% down, 40% expense, 30-year math at the current 6.8% market mortgage rate. Of the 18 metros we track, 4 clear the 1.2 lender line, sorted by coverage below. Use them as a yardstick for the deal you are pricing. Updated June 19, 2026.
| Metro | Median price | Rent | DSCR | Clears 1.2? |
|---|---|---|---|---|
| Birmingham, AL | $122,274 | $1,448 | 1.45 | Yes |
| Memphis, TN | $124,349 | $1,441 | 1.42 | Yes |
| Chicago, IL | $226,376 | $2,266 | 1.23 | Yes |
| Cleveland, OH | $146,863 | $1,461 | 1.22 | Yes |
| Tampa, FL | $236,141 | $2,018 | 1.05 | No |
| Phoenix, AZ | $330,995 | $1,742 | 0.65 | No |
| Austin, TX | $303,942 | $1,635 | 0.66 | No |
| Las Vegas, NV | $314,948 | $1,737 | 0.68 | No |
The pattern is price relative to rent. Birmingham and Memphis cover the loan on homes near $122,274 renting for about $1,448. Phoenix earns a similar rent on a home near $330,995, so the payment swamps it. See the full ranking on the markets page below.
The DSCR formula
Net operating income (NOI) equals gross annual rent minus operating expenses such as taxes, insurance, management, maintenance, and vacancy. Annual debt service equals monthly principal + interest times 12. The calculator applies a 40% expense load with 25% down and 30-year amortization by default.
What moves your DSCR
Price
A lower purchase price shrinks the loan and the payment, which lifts coverage fastest.
Rent
Higher rent raises NOI directly. A small rent bump can move you over the line.
Rate and down payment
More money down or a lower rate cuts the payment. At ~7.75% the payment is the main drag.
Across the 18 metros we track on live Zillow prices and rents, only 4 clear 1.2 at the current 6.8% market mortgage rate: Cleveland, Memphis, Birmingham, and Chicago. The cheaper Midwest and Southern metros cover the loan; pricier coastal and Sun Belt metros do not. Use the inputs above to find the margin your own deal needs. These are estimates, not a loan quote.
Common questions
How is DSCR calculated?
DSCR = net operating income ÷ annual debt service. NOI is gross annual rent minus operating expenses (not the mortgage); debt service is your annual principal + interest.
What DSCR do I need to qualify for a DSCR loan?
Most lenders require 1.2. A ratio above 1.25 typically earns better pricing, and below 1.0 means the rent does not cover the loan payment.
Does this calculator include taxes and insurance?
They are bundled into the operating-expense load (40% by default), which also covers management, maintenance, and vacancy. Adjust that percentage to match your market.
Why does my deal fall short of 1.20 at today’s rates?
At a ~7.75% DSCR loan rate the payment is high relative to rent in most metros. Closing the gap usually means a lower price, higher rent, or a larger down payment.