DSCR calculator for rental property loans
Calculate the debt service coverage ratio (DSCR) for a rental property: rent divided by PITIA, what lenders require, and the largest loan the rent supports.
The short answer
DSCR (debt service coverage ratio) is the property's monthly rent divided by its monthly principal, interest, taxes, insurance and HOA dues (PITIA). A DSCR of 1.00 means the rent exactly covers the payment. Many lenders want at least 1.00, and some go as low as 0.75 with more down and larger reserves (Defy Mortgage, 2026). Example: $3,200 rent / $3,079 PITIA = 1.04.
The DSCR formula
DSCR = gross monthly rent ÷ monthly PITIA. PITIA is principal, interest, property taxes, homeowners insurance and association dues. Lenders use the lease, or the appraiser's market rent for a vacant or newly purchased unit.
Worked example: a $360,000 loan at 7.75% for 30 years has principal and interest of about $2,579. Add $350 taxes, $150 insurance and no HOA for PITIA of $3,079. With $3,200 rent, DSCR = 3,200 ÷ 3,079 = 1.04.
What DSCR do lenders require?
| DSCR | What it means | Typical lender response |
|---|---|---|
| 1.25 or higher | Rent covers the payment with 25% to spare | Best pricing and highest loan-to-value |
| 1.00 to 1.24 | Rent covers the payment | Meets the common minimum |
| 0.75 to 0.99 | Rent covers most of the payment | Some lenders, usually with 25% to 35% down and more reserves |
| Below 0.75 | Rent covers well under the payment | Few lenders |
Ranges are drawn from Defy Mortgage's published 2026 requirements, which list 1.00 or higher as typical and 0.75 as its own floor. Every lender sets its own minimum. DSCR loan requirements in 2026 covers credit scores, down payments and reserves.
Why DSCR loans skip income documents
A DSCR loan is made to buy or refinance a rental property you won't live in. Federal Truth in Lending rules treat credit to acquire or maintain non-owner-occupied rental property as business-purpose credit (Regulation Z 1026.3 and its commentary), so the lender qualifies the property's cash flow instead of your personal income.
Frequently asked questions
What is a good DSCR for a rental property?
1.25 or higher is strong and usually gets better pricing. 1.00 is the most common minimum, meaning rent covers the full payment.
How do you calculate DSCR for a mortgage?
Divide the monthly rent by the monthly principal, interest, taxes, insurance and HOA dues (PITIA). $3,200 rent divided by $3,079 PITIA is 1.04.
Can I get a DSCR loan below 1.0?
Some lenders allow it. Defy Mortgage lists a 0.75 minimum for 2026, typically with 25% to 35% down and higher reserves.
Does DSCR include property management fees?
Usually not. Most residential DSCR lenders divide gross rent by PITIA. Commercial lenders often use net operating income instead, so ask which method your lender uses.
Can I use a DSCR loan for my primary home?
No. DSCR loans are for investment properties. Primary residences and second homes are not eligible.