DSCR Loan Calculator
Calculate your debt service coverage ratio in seconds and see whether your rental property qualifies for a DSCR loan.
Your DSCR
1.20
Qualifies with most lenders
Monthly PITIA
$0
Principal & Interest
$0
What this means:
—
or call (888) 703-1840
Disclaimer: This DSCR calculator provides estimates for educational purposes only. Actual qualification depends on lender guidelines, appraisal, market rent analysis, credit and property type. Sponsored by Save Financial, Inc. (NMLS #377740). California DRE #01875766. Equal Housing Lender. This is not a commitment to lend.
How to Calculate DSCR on a Rental Property
DSCR — debt service coverage ratio — is the single number a DSCR lender uses to decide whether a rental property qualifies. It compares the rent the property brings in against the full monthly payment it has to support. The formula is simple: DSCR = gross monthly rent ÷ monthly PITIA, where PITIA is principal, interest, taxes, insurance and any HOA dues.
A DSCR of 1.00 means the property exactly breaks even. Above 1.00 it produces more rent than it costs to carry; below 1.00 it needs support from your other income. Because the calculation looks only at the property, a DSCR loan never asks for your tax returns, W-2s, or debt-to-income ratio — which is why investors with heavy write-offs or many financed properties use them.
What DSCR Do Lenders Require?
Most California DSCR lenders look for 1.20 to 1.25 for the best pricing. Many will go down to 1.00, and a smaller group will accept ratios as low as 0.75 with a larger down payment. Below 1.00 you are generally trading a lower ratio for a higher rate, more points, or both.
Improving a Weak DSCR
Three levers move the number. Increase the rent — a short-term rental strategy often underwrites higher than a long-term lease. Reduce the loan amount with a larger down payment, which cuts principal and interest directly. Or extend the amortization: a 40-year term or an interest-only period lowers the monthly payment and lifts DSCR without changing the purchase price.
Frequently Asked Questions
What is a good DSCR for a rental property?
Most lenders consider 1.25 or higher strong, and that ratio earns the best DSCR loan pricing. Between 1.00 and 1.25 you will still qualify with most California DSCR lenders. Below 1.00 the rent does not fully cover the payment, and options narrow to lenders that allow ratios down to about 0.75 with a larger down payment.
How is DSCR calculated?
DSCR equals gross monthly rental income divided by the monthly PITIA payment — principal, interest, taxes, insurance and HOA. If a property rents for $4,500 and the full monthly payment is $3,750, the DSCR is 1.20.
Does a DSCR loan check my personal income?
No. A DSCR loan qualifies on the property's rental income alone. There is no tax return review, no W-2 requirement, and no personal debt-to-income calculation, which is why self-employed investors and those with many financed properties use them.
What down payment do DSCR loans require in California?
Most California DSCR programs require 20% to 25% down for a purchase. A stronger DSCR can reduce the requirement toward 20%, while a ratio near or below 1.00 usually pushes it to 25% or more.
Can I use short-term rental income for DSCR?
Yes. Many lenders will underwrite Airbnb and VRBO income for a DSCR loan, typically using a 12-month history or an AirDNA market projection. Short-term rental income often produces a higher DSCR than a long-term lease on the same property.
Are DSCR loan rates higher than conventional?
Generally yes — DSCR rates typically run about 1% to 2% above a comparable conventional investment property loan, because the lender is relying on the property rather than the borrower's income. The trade-off is far simpler documentation and no limit on the number of financed properties.
Ready to move forward?
Get a free, no-obligation consultation from a licensed California advisor.
Get your free quote
No obligation. No credit pull. A licensed advisor replies within one business day.