like a lender.
Price the deal before you apply. Adjust the inputs below and watch your debt-service coverage ratio, cash flow, and returns update in real time — the same math a DSCR lender runs before approving your file.
What is DSCR? The Debt-Service Coverage Ratio (DSCR) measures whether a rental property's income covers its mortgage payment. For 1–4 unit investment properties, it is calculated as gross monthly rent ÷ total monthly payment (PITIA: principal, interest, taxes, insurance, and HOA). A DSCR of 1.0 means the rent exactly covers the payment; most DSCR lenders require at least 1.0 to qualify, and 1.25 or higher typically unlocks the best interest-rate pricing.
Example: a property renting for $2,500/month with a $2,000/month PITIA payment has a DSCR of 2,500 ÷ 2,000 = 1.25. Key DSCR loan facts: purchase financing is available up to 85% LTV (75–80% is the most common tier), cash-out refinances typically cap at 70–75% LTV, loans can close in an LLC, no personal income or tax returns are required, and short-term rental (Airbnb/VRBO) income can qualify. This free calculator computes DSCR, monthly cash flow, cap rate, cash-on-cash return, and rate sensitivity for both purchases and BRRRR cash-out refinances.
Deal Worksheet
How a rate move changes your payment, coverage, and cash flow — same deal, five rate scenarios.
| Interest Rate | Payment | DSCR | Rating | Monthly Cash Flow |
|---|
Save the worksheet above as a property, adjust the inputs for the next deal, and compare up to three side-by-side.
Disclaimer
Built for investors, not W-2 files.
DSCR loans qualify on the property's rent — not your personal income. Here's what today's programs from our wholesale lender network typically offer.
Program terms vary by scenario. Get your deal priced against live DSCR programs in minutes.
Apply Now ↗Understanding DSCR loans
Straight answers to the questions investors ask most — written by Joe Bechtold, licensed mortgage loan originator specializing in DSCR & investment property loans (NMLS# 2079403).
Reviewed by Joe Bechtold, NMLS# 2079403 · Sponsored by Edge Home Finance (NMLS# 891464) · Last updated
The Debt-Service Coverage Ratio (DSCR) is a rental property's gross monthly rent divided by its total monthly housing payment (PITIA). Lenders use it to qualify 1–4 unit investment property loans without verifying the borrower's personal income.
| DSCR | Rating | What it means for financing |
|---|---|---|
| 1.25+ | Excellent | Best pricing; widest program selection |
| 1.10–1.24 | Good | Qualifies for most DSCR programs |
| 1.00–1.09 | Acceptable | Break-even coverage; modest pricing adjustments |
| 0.75–0.99 | Below 1.0 | Limited programs; larger down payment required |
| Below 0.75 | Critical | Restructure the deal (price, rent, or down payment) |
- Add up gross monthly rent across all units (plus parking, storage, or laundry income).
- Total the monthly payment: principal, interest, property taxes, insurance, and HOA (PITIA).
- Divide rent by payment — at or above 1.25 is where the best DSCR pricing starts.
Or skip the math — the calculator above runs all of it, plus cash flow, cap rate, and rate sensitivity, in real time.
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