DSCR calculator help
How the calculator works: monthly rent divided by the full monthly payment.
DSCR calculator help steps
Step 1
Size the loan
Property value times leverage (LTV) gives the loan amount. A $400,000 property at 75% LTV is a $300,000 loan.
Step 2
Add up the monthly payment
Principal and interest on a 30-year schedule, plus one twelfth of the annual taxes, insurance and HOA dues. Lenders call this PITIA.
Step 3
Divide rent by the payment
At 1.00 the rent covers the payment exactly. 1.25 or more is strong coverage. Below 1.00, the rent falls short of the payment.
Quick example
$300,000 loan at 7.25% over 30 years$2,046.53 principal and interest+ $550.00 taxes and insurance ($6,600 a year ÷ 12)= $2,596.53 monthly PITIA$3,000 rent ÷ $2,596.53= 1.16 DSCR