DSCR Loan Calculator for California Rental Properties
A DSCR loan is qualified on the property's rent set against its own monthly housing expense, and the debt service coverage ratio is that comparison as one number. Put in the rent and the expense lines and this DSCR loan calculator divides one by the other, shows every part of the denominator, and says where a lender's own method can land somewhere else.
DSCR check
What that works out to
- Principal and interest
- $1,900
- Property taxes
- $350
- Insurance
- $150
- Association dues
- $100
- Monthly housing expense
- $2,500
- Coverage ratio
- 1.20
The formula Rent divided by the payment, taxes, insurance and dues.
The rent goes in exactly as entered, and the ratio is that rent divided by the expense beside it. A lender may count only a share of the rent, or use the appraiser's market rent instead of the lease.
This is the arithmetic, not any lender's rule. Each lender sets how it reads the rent, which payment it divides into it and where its line sits, and changes those without notice.
Coverage ratio: 1.20
These are estimates from the figures you entered, not a quote, an offer, or a commitment to lend.
A calculator works from the figures you typed into it. Your loan officer works from your file and your credit, against the lenders on our panel.
Ask us for a real quoteWhat a loan officer checks next
- Occupancy and business purpose: a rental you will not live in, with the loan's purpose stated in writing.
- Evidence of the rent: the lease in place, or the appraiser's comparable rent schedule for the market rent.
- The property: how many units, and whether it is the kind of residential rental the lender takes.
- The proposed terms: the payment the ratio was worked against, which moves with the rate, the term and the equity up front.
- Reserves: what is left after closing, measured in months of the property's payment, by the lender's own rule.
- What you are after: holding the property, pulling equity out of it, or buying the next one.
A home you will live in is not a DSCR loan: it is a consumer loan, qualified on your income or assets. For that, start with buying a home.
How the math works
The debt service coverage ratio is the monthly rent divided by the monthly housing expense: principal and interest, property taxes, insurance and association dues, added together. A ratio above one means the rent clears the expense; below one, it does not.
The figures the fields open on are a worked example of exactly that, and changing any one of them moves the ratio. Raise the insurance line and the ratio falls, which is the sensitivity an investor wants to see before a quote.
The ratio is rounded to two places only when it is printed. Nothing is assumed about vacancy, management or repairs: those are costs an investor carries, but they are not part of the ratio a DSCR lender computes.
With no expense entered there is no denominator, so the calculator asks for the expenses rather than printing a figure.
Starting assumptions
No tax or insurance defaults from the county here: the expense lines are the property's own figures, typed in per month. The figures it opens on are a worked example, and every one of them is yours to change.
These are estimates from the figures you entered, not a quote, an offer, or a commitment to lend.
Questions about the DSCR check
What is a good DSCR for a rental property loan?
A ratio above one means the rent covers the property's payment, taxes, insurance and dues; below one, it does not. Where a lender draws its line is the lender's own rule, and it differs from one lender to the next and changes without notice, so this calculator shows the ratio and names no minimum.
What counts as rent in a DSCR calculation?
The rent under the lease in place, or the market rent the appraiser reports on a comparable rent schedule. This calculator takes the rent as entered. A lender may count only a share of it, or use the market rent instead of the lease.
What goes into the housing expense?
Principal and interest on the proposed loan, property taxes, insurance and association dues, each as a monthly figure. Vacancy, management and repairs are real costs of owning a rental, but they are not part of the ratio a DSCR lender computes.
Can I use a DSCR loan for a home I will live in?
No. A DSCR loan is business-purpose credit on a rental you do not occupy, which is why a lender may qualify it on the rent. A home you will live in is a consumer loan, qualified on your own income or assets, under a conventional, FHA or similar program.
Does a ratio above one mean the loan is approved?
No. The ratio is one input. A lender also reads credit, reserves after closing, the property type, the evidence for the rent and the loan's purpose, and sets its own rules on each. The calculator is an estimate from the figures you entered, not an approval.
Pick the question you are trying to answer
- Monthly payment
What leaves your account each month once taxes, insurance and dues are inside the figure.
- Affordability
What your income carries once your debts, the taxes and the insurance come out of it.
- Refinance break-even
The month the closing costs are paid back, and what the new loan costs over its life.
- Amortization schedule
Every payment, split into interest and principal, year by year.
- Rent vs buy
What renting costs against what owning costs over the years you plan to stay, with the sale at the end counted.
- HELOC payment
The monthly figure on a HELOC balance at the rate you were quoted.
- Closing costs
Add up the lines on a Loan Estimate and see what the credits take off.
A quote needs your file
Send us what you are working with, and your loan officer can price it against the lenders on our panel.
No credit pull to get started. This is not a commitment to lend. Equal Housing Opportunity.