April 14, 2026
What is DSCR? A Plain-English Guide for Real Estate Investors
DSCR is the number lenders use when evaluating rental property loans. This guide covers what the ratio means, what thresholds qualify, and what affects it.
Read More →DSCR Loan Calculator
Enter your rental income and loan details to find out whether your property generates enough income to qualify for a DSCR loan.
How to Read Your Result
The DSCR ratio tells you how much income this property generates relative to what it costs to carry the loan. A ratio of 1.25 means the property brings in $1.25 for every $1.00 of debt service — a healthy margin that most lenders will approve. A ratio of 0.95 means the property comes up short by 5 cents on every dollar, which means you would need to subsidize it from other income.
The color-coded verdict is based on common lender thresholds. Green (1.25 and above) means most lenders will approve the loan at standard terms. Yellow (1.0 to 1.24) is borderline — some lenders will approve, often with a larger down payment or cash reserves requirement. Red (below 1.0) means the property does not qualify under standard DSCR lending guidelines.
How DSCR Is Calculated
The calculation compares two things: the income the property generates and the monthly cost of carrying the loan. The income is the monthly rent. The cost is the mortgage payment plus property taxes plus insurance. When income exceeds cost, the ratio is above 1.0 and the property is self-financing. When cost exceeds income, the ratio falls below 1.0 and the property requires outside subsidy.
The specific numbers that matter most: your loan amount (purchase price minus down payment), your interest rate, and how much the property rents for. Those three variables drive the ratio more than anything else. Increasing the down payment, finding a lower purchase price, or securing a lower rate are the primary ways to improve a borderline ratio.
Frequently Asked Questions
Related Articles
April 14, 2026
How to Use a DSCR Calculator: Step by Step
A walkthrough of every input field — what each number means, where to find it, and how to interpret the result to make better investment decisions.
Read More →April 14, 2026
DSCR Loan Requirements: What Most Lenders Actually Want
Minimum DSCR ratios, credit score requirements, down payment rules, and property types that qualify — with specific numbers from the current lending market.
Read More →April 14, 2026
DSCR Loan vs Conventional Loan: Which is Right for Your Rental Property?
A side-by-side comparison of DSCR and conventional investment property loans covering qualification, rates, documentation requirements, and when each one makes sense.
Read More →