Commercial Real Estate Tool · Free
Commercial DSCR Calculator
Enter your NOI and loan terms to get the debt service coverage ratio lenders underwrite to — plus debt yield, break-even NOI, rate sensitivity, and the maximum loan your income supports at a target DSCR.
Loan & income inputs
Rents plus other income, minus operating expenses — before debt service.
First-mortgage principal you're testing.
Annual note rate; payment assumes monthly amortization.
Longer amortization lowers the payment and raises DSCR.
Optional — adds loan-to-value and implied cap rate to the results.
Most commercial lenders require 1.20–1.35× on stabilized income.
Debt Service Coverage Ratio
0.90×
Negative coverage — income doesn't fully cover the debt payment.
Below your 1.25× target — the loan is too large for this income.
Annual debt service
$165,819
$13,818 / month at 6.75% over 25 yrs
Max loan at 1.25× DSCR
$1,447,363
Largest loan this NOI supports at the target ratio
Debt yield
7.50%
NOI ÷ loan — a rate- and amortization-independent leverage check
Break-even NOI (1.00×)
$165,819
NOI is $15,819 short of covering debt service
Why this result
At 6.75% over 25-yr amortization, every $1,000,000 borrowed costs $82,909 a year in debt service (a 8.29% mortgage constant). Your $150,000 NOI ÷ $165,819 debt service = 0.90×. To qualify at 1.25×, trim the loan by $552,637 (to $1,447,363) or grow NOI to $207,273.
Interest-rate sensitivity
| −100 bps | −50 bps | Quoted | +50 bps | +100 bps | |
|---|---|---|---|---|---|
| Rate | 5.75% | 6.25% | 6.75% | 7.25% | 7.75% |
| DSCR | 0.99× | 0.95× | 0.90× | 0.86× | 0.83× |
| Max loan at 1.25× | $1,589,556 | $1,515,911 | $1,447,363 | $1,383,495 | $1,323,927 |
Same NOI, loan, and amortization — only the note rate moves. Red cells fall below your target ratio. Lenders often stress-test DSCR at a rate above the quote, so the +50/+100 bps columns preview that underwriting.
Estimate only. DSCR is NOI ÷ annual debt service; debt yield, break-even, and sensitivity figures are pure arithmetic from your inputs. Actual lender sizing also weighs LTV, debt yield, tenant credit, lease term, reserves, and stress-test rates. Not a loan offer or commitment.
How DSCR works
DSCR = annual NOI ÷ annual debt service. It's the first ratio a commercial lender checks: it tells them whether the property's income can cover the mortgage with room to spare. A 1.25× DSCR means the property throws off 25% more income than the debt payment requires.
To size a loan, lenders flip it around: they take your NOI, divide by their minimum DSCR to get the largest debt service they'll allow, then solve for the loan amount that fits at current rates and amortization. This calculator shows both — your DSCR on a given loan, and the max loan your NOI supports at a target ratio. It also reports debt yield (NOI ÷ loan), the break-even NOI where coverage hits 1.00×, and how the ratio moves if the rate shifts ±100 bps — the cushion, not just the ratio. Add an optional property value to see LTV and the implied cap rate too. Pair it with the cap rate calculator and the deal analyzer to model a full acquisition.
DSCR FAQs
What is DSCR in commercial real estate?
DSCR (Debt Service Coverage Ratio) measures how well a property's net operating income covers its debt payments. It's calculated as NOI ÷ annual debt service. A DSCR of 1.25× means the property generates 25% more income than needed to pay the mortgage. Below 1.0× means the income doesn't cover debt service.
What DSCR do commercial lenders require?
Most commercial lenders require a minimum DSCR of 1.20× to 1.35× on stabilized income, with 1.25× the most common benchmark. Stronger tenants, longer leases, and lower-leverage requests can push the minimum lower; riskier or transitional assets push it higher. Lenders also stress-test DSCR at a higher assumed rate.
How do I calculate the maximum loan from DSCR?
Divide NOI by the target DSCR to get the maximum allowable annual debt service, then solve for the loan principal that produces that payment at the given interest rate and amortization. This calculator does it automatically — it shows both your current DSCR and the largest loan your NOI supports at the target ratio.
What is debt yield and how is it different from DSCR?
Debt yield is NOI ÷ loan amount, expressed as a percentage. Unlike DSCR, it ignores interest rate and amortization entirely, so lenders use it as a rate-independent check on leverage — a low rate or long amortization can flatter DSCR, but it can't move debt yield. This calculator reports both ratios side by side.
Disclaimer: This calculator is for educational and informational purposes only and is not a loan offer, commitment, or financial advice. Actual loan sizing depends on LTV, debt yield, tenant credit, lease term, reserves, and lender stress-test rates. Consult a licensed lender and a commercial real estate professional before making financing decisions.
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