CRE Tools · Debt
Debt Service Coverage Ratio Calculator
Compare a property's operating income with the debt payments it must support.
Retail Blueprint · Calculator
DSCR = NOI ÷ Annual Debt Service
Total principal and interest paid over 12 months.
Commercial real estate loans may include fees, reserves, interest-only periods, balloon payments, variable rates, and other terms not reflected in simplified calculations.
DSCR
1.39x
Above 1.00x — NOI exceeds annual debt service.
- Above 1.00x · NOI exceeds annual debt service
- 1.00x · NOI equals annual debt service
- Below 1.00x · NOI does not fully cover debt service
Understand the metric
01
What this metric means
DSCR compares property operating income with required debt payments. A ratio of 1.25x means NOI is 1.25 times annual debt service.
02
Why it matters
Lenders use DSCR to size loans and gauge cushion against income declines. Lender requirements vary based on lender, property, loan structure, market, borrower, and other underwriting considerations — there is no universal threshold.
03
How it is calculated
- DSCR = NOI ÷ Annual debt service
- Annual debt service = Monthly payment × 12
- Example: $250,000 ÷ $180,000 = 1.39x
04
Related concepts
- Net operating income
- Loan-to-value (LTV)
- Amortization and loan term
- Cash flow before tax
Watch & Learn · In production
Commercial real estate debt explained — Retail Blueprint video
An original Retail Blueprint video will appear here when published.
Retail Blueprint tools are provided for educational and informational purposes only. Results are estimates based on the information entered and simplified assumptions. They should not be considered investment, financial, lending, legal, tax, or accounting advice. Actual property performance, financing terms, expenses, returns, and valuation may differ.