Check DSCR (Debt Service Coverage Ratio) for commercial
For commercial borrowers verifying lender requirements: calculate DSCR to ensure NOI covers debt service with appropriate buffer.
Commercial DSCR Calculator
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Create Free AccountWhat it does
The Commercial DSCR Calculator determines the Debt Service Coverage Ratio by dividing NOI by annual debt service, showing whether a commercial property can sustain its debt obligations. Most lenders require 1.25x-1.5x DSCR; lower ratios restrict financing options.
DSCR is the commercial lender's primary qualification metric — properties with insufficient DSCR face limited financing, higher rates, or cash purchase requirements. This calculator shows whether commercial properties meet lender thresholds and validates financing feasibility.
Who it's for
- Commercial investors validating loan qualification before acquisition commitment
- Commercial lenders calculating maximum loan sizing based on DSCR requirements
- Brokers presenting financing-ready analysis to buyers and evaluating marketability
- Appraisers and analysts assessing income stability and debt capacity
How it works
Calculate NOI
Gross potential income minus all operating expenses.
Calculate annual debt service
Monthly debt service (P&I) times 12.
Divide NOI by debt service
DSCR = NOI ÷ annual debt service. Lenders typically require 1.2–1.5x.
Why it matters
Calculate DSCR to verify lender requirements are met
Identify minimum NOI needed for loan approval
Model different loan sizes and rates
Determine whether NOI supports refinance at future lender rates
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Frequently asked questions
What DSCR do lenders require?
Standard: 1.25x. Some allow 1.2x; others require 1.5x. Lower DSCR = higher risk = less desirable to lenders.
What if my DSCR is below 1.25x?
Increase NOI (raise rents, cut expenses), reduce loan amount, or extend term (lowers annual debt service).
Is DSCR the only ratio lenders care about?
No — also LTV (loan to value), debt service ratio (DSR), reserves, and personal credit. All must meet lender standards.
Does DSCR account for capital reserves?
No — DSCR uses stabilized NOI. Wise borrowers reserve 6–12 months debt service separately for capital expenses.
Is this calculator free to use?
Yes — create a free Investor Starter account to run 1 calculator per day. No credit card required. Upgrade to Core ($49/mo) for unlimited access to all 67 calculators.
How accurate are the results?
Results are only as accurate as your inputs. The formulas use industry-standard real estate investment math. Always verify with a licensed professional before committing capital.
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