DSCR Calculator
Calculate and stress-test debt service coverage ratio for commercial real estate lending.
Frequently asked questions
What is a good DSCR for commercial real estate?
Most commercial lenders require a minimum DSCR of 1.20x-1.25x for stabilized properties, with 1.35x+ preferred for retail and hospitality. A DSCR of 1.00 means net operating income exactly equals debt service — anything below 1.00 means the property cannot cover its debt from operations.
How is DSCR calculated?
DSCR = Net Operating Income ÷ Annual Debt Service. NOI is revenue minus operating expenses (before debt and taxes); annual debt service is the sum of principal-and-interest payments for the year on all loans on the property.
Why do lenders stress-test DSCR?
Stress testing models what happens to DSCR if rents drop, vacancy rises, or interest rates increase at refinance. This calculator lets you shock each input independently and shows the DSCR under each stressed scenario so you know how much cushion the deal actually has.