Debt service coverage ratio (DSCR)
The ratio of a property’s net operating income to its annual debt service — the number DSCR lenders qualify the loan on.
In plain terms
DSCR = NOI ÷ annual debt service. A ratio of 1.00 means income exactly covers the mortgage; lenders on investment property usually require at least 1.20–1.25. DSCR loans qualify the property on its own cash flow rather than your personal income. Compute it with the DSCR calculator.