Follow the default numbers.
With purchase price of $350,000, monthly rent of $2,400, the model gives noi / debt service: 0.85×.
The formula is dscr = income ÷ debt service. Open the breakdown to trace expenses and assumptions. Change one input at a time to see how your decision changes. This example uses scenario inputs; it is not an offer, tax bill, appraisal or legal determination.
Choose the income measure your lender uses
Commercial DSCR commonly uses NOI divided by annual debt service. Some residential investor programs instead divide monthly gross rent by PITIA: principal, interest, taxes, insurance and association dues. These are different underwriting measures. The selector makes the chosen convention visible and changes both the ratio and the maximum-loan estimate. Do not compare one measure with a threshold quoted for the other.
The ratio describes a cushion
A ratio of one means modeled income equals the selected debt obligation. A threshold above one requires more income than debt cost, creating a buffer. The threshold is an input rather than a promise of approval. Lenders may use appraiser rent, a vacancy factor, reserves, different expense adjustments or a stressed interest rate. Your personal credit, liquidity and property eligibility also matter.
Maximum loan is limited twice
The calculator first converts income and the target ratio into a permitted loan payment. It then solves that payment into principal at the entered rate and term. An LTV ceiling based on the entered appraised refinance value is applied as a second constraint. Cash-out subtracts current payoff and acquisition closing-cost allowance from that constrained loan. The model does not quote a lender or establish the appraised value.
Test the fragile assumptions
Raise the interest rate, lower the supported rent and include the expected tax reset. A deal that barely passes one scenario may have little room for a vacancy or insurance increase. Interest-only payments can improve the ratio while leaving a balloon principal balance. Use the rental property report to see the cash reserve and longer-term equity assumptions alongside the lender-style ratio.
Keep your assumptions with the result
Save the calculation to your deal file to reuse compatible inputs in another tool. The file stays in this browser on this device. Download the CSV to open the complete inputs, results and schedule in Excel or Google Sheets. Use PDF to print the report or save it as a PDF. A share link includes entered financial figures in its URL, so use it only with people you intend to share those numbers with.