What is DSCR?
Debt-Service Coverage Ratio is the single number that tells a lender whether a rental pays for itself.
The one-line definition
DSCR is qualifying monthly rent divided by the monthly payment (principal, interest, taxes, insurance, and any HOA — together, PITIA). A DSCR of 1.20× means rent covers the payment 1.2 times over.
Why lenders use it
DSCR loans qualify the property, not your paycheck. Instead of tax returns and W-2s, the lender asks a simpler question: does the rent cover the debt? That makes DSCR financing popular with self-employed investors and anyone scaling a portfolio.
What counts as a good number
Many programs want at least 1.0× — rent fully covers the payment. Above 1.20× is comfortable and often unlocks better terms; below 1.0× means the property runs a shortfall and may need more down or a lower rate to qualify.
How to move it
Three levers change DSCR: rent (up is better), the payment (a lower rate, longer term, or bigger down payment shrinks it), and expenses (taxes, insurance, HOA). Our analyzer lets you drag each one and watch the ratio respond.
Estimate only. All figures are estimates for informational purposes only — not an approval, commitment to lend, or rate offer. Actual terms depend on lender underwriting, credit, appraisal, reserves, and property condition.