DSCR Calculator

DSCR measures whether the property's income can cover the loan payment; Loan-to-Value measures how much of the property's value the loan represents. A deal can have a comfortable LTV (a large equity cushion) but a poor DSCR if income is thin relative to the debt service, or vice versa -- lenders typically look at both together, not either one alone.

A longer amortization period spreads the same Loan Amount over more monthly payments, which lowers each individual payment and therefore the total Annual Debt Service. Since DSCR is Net Operating Income divided by that debt service, a smaller debt service figure produces a higher DSCR -- the tradeoff is more interest paid in total over the life of a longer loan.

No. Property Value only feeds into Loan-to-Value in this calculator; DSCR, Debt Yield, Monthly Payment, Annual Debt Service, Max Loan at 1.25 DSCR, and Debt Service Coverage Burden are all driven by Net Operating Income, Loan Amount, Interest Rate, and Loan Term, and do not reference Property Value in their formulas at all.

Not automatically, though it is a red flag most commercial lenders take seriously -- it means the property's own income is not enough to cover its debt service, so the borrower would need to cover the shortfall from other sources. Whether a specific deal can still close depends on the lender, the loan program, and other compensating factors like borrower net worth or additional collateral.

It doesn't -- Debt Yield in this calculator is defined purely as Net Operating Income divided by Loan Amount, with no reference to rate or amortization at all, which is exactly why some lenders favor it over DSCR: it cannot be flattered by a longer term or a lower rate the way DSCR can.