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Rental DSCR and refinance calculator

Lenders size investor loans on the debt service coverage ratio: net operating income over the year’s loan payments. See where your property stands and what a refinance could support.

  • Runs in your browser; nothing is stored
  • Educational, not advice

Your figures

Sample household

Filled in with a sample household. Replace any figure with yours.

The property

Taxes, insurance, repairs, management. Not loan payments.

Today’s loan

Remaining term on today’s balance.

Payments are interest without principal.
A refinance

Debt service coverage

Sample household
DSCR
1.59x
minimum 1.25x
Headroom
22%
NOI can fall before a breach
Cash flow
$22,419
per year, after loan payments
Refinance room
-$21.2K
before costs and loan-to-value

At 1.59x, NOI could fall 22% before the 1.25x minimum. At 6.75%, income alone supports a loan $21.2K smaller than today’s balance.

Show the math
  1. Effective incomeGross rent × (1 − vacancy)$91,200
  2. Net operating income (NOI)Effective income − operating expenses$60,200
  3. Debt service12 × the monthly payment on the balance, rate and amortization$37,781
  4. DSCRNOI ÷ debt service1.59x
  5. NOI at the minimumDebt service × minimum DSCR$47,226
  6. Headroom1 − minimum ÷ DSCR21.6%
  7. Largest loan at the minimumThe loan whose payments at the new rate and term equal NOI ÷ minimum$618,770
  8. Refinance roomLargest loan − today’s balance-$21,230
  • Lenders also cap loans by loan-to-value, reserves and global cash flow, so proceeds can be lower.
  • Closing costs, prepayment penalties and reserves aren’t included.
  • Educational, not advice.

How this calculator works

Net operating income (NOI) is rent after vacancy, minus operating expenses: property tax, insurance, repairs, management and utilities you pay. Loan payments aren’t operating expenses.

DSCR is NOI divided by a year of loan payments. Headroom is how far NOI could fall before DSCR hits the lender’s minimum. Refinance room is the largest loan your NOI supports at that minimum on the new terms, minus what you owe today.

Lenders also limit a loan by loan-to-value, reserves and your global cash flow, so real proceeds can be lower. Closing costs aren’t included.

Questions

What DSCR do lenders look for?

Many investor and commercial lenders want 1.20x to 1.35x; 1.25x is common. Your loan documents state yours, and some lenders test it on trailing twelve months of actual income.

Why is my refinance room negative?

Because at the new rate and term, your NOI supports a smaller loan than you owe today. A higher rate shrinks the loan the same income can carry.

Does this include my other properties?

No, it tests one property. Lenders often look at global cash flow across everything you own, which is what WealthCEO’s lender packages assemble.

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Educational, not advice. These tools use simplified models; take decisions to your CPA, attorney or adviser.