How to Calculate DSCR for a Rental Property (With Examples)

By the BridgePoint Lending team · October 4, 2026

The debt service coverage ratio (DSCR) is the number a DSCR lender cares about most. The good news is that it is simple arithmetic. Here is how to do it yourself before you ever make an offer.

The formula

DSCR = monthly rent ÷ monthly PITIA
PITIA = principal + interest + property taxes + insurance + HOA dues (if any)

Step by step

Find the monthly rent. Use the current lease if the property is rented, or the market rent estimate if it is vacant or being purchased.
Estimate the monthly payment. Principal and interest depend on the loan amount, rate and term. Add monthly property taxes, insurance and HOA dues.
Divide. Rent divided by total payment is your DSCR.

Example 1: a rental that clears 1.0

A single-family rental rents for $2,500 a month. The loan payment (principal and interest) is $1,600, taxes are $250, insurance is $120 and there is no HOA. PITIA is $1,970.

$2,500 ÷ $1,970 = 1.27 DSCR

The rent covers the payment with room to spare, which most DSCR programs like to see.

Example 2: a rental that falls short

Another property rents for $1,800, but the payment including taxes, insurance and a $90 HOA is $2,050.

$1,800 ÷ $2,050 = 0.88 DSCR

The rent does not cover the payment. Some programs still work below 1.0 with more money down or different pricing, but options narrow.

What counts as a “good” DSCR?

There is no single answer, since it varies by program. As a rule of thumb, 1.0 is break-even on the payment, and ratios comfortably above 1.0 tend to unlock better pricing and leverage. A ratio well above 1.0 also means more cushion for vacancies and repairs.

Common mistakes

Leaving out taxes, insurance or HOA. The lender counts them, so you should too. In high-tax or high-insurance areas they can change the answer.
Using hopeful rent. Lenders typically rely on a lease or an appraiser’s market rent, not the top of what you think you might get.
Forgetting that the rate changes the payment. A different rate or loan amount moves the ratio, so check more than one scenario.

Skip the math

Our DSCR calculator does it for you, and the estimator shows a ballpark rate range and loan amount for your property.

This article is educational and is not financial, legal or tax advice. Examples are illustrations only. Loan terms vary by borrower, property and lender, and all loans are subject to approval.