Finance category
Mortgage, loan, investing, tax, and money calculators.
Loan Coverage Ratio Calculator
The loan coverage ratio tells a lender whether your property generates enough income to comfortably make the mortgage payment. This calculator compares NOI to annual debt service against a target coverage ratio.
commonly 1.20–1.25
Coverage ratio
1.43
NOI ÷ annual debt service
Underwriting status
Passes lender minimum
Max monthly payment at target
$4,533
what NOI will support
NOI cushion over target
$8,750
Annual debt service
$47,400
How the math works
Loan Coverage Ratio (often called DSCR for real estate) measures how comfortably property income covers the mortgage. A 1.25 ratio means NOI is 25% bigger than the mortgage payment — a typical lender minimum for stabilized commercial and investment properties.
Stricter lenders require 1.30–1.40 on thin-margin or risky properties. Short-term rentals and owner-occupant DSCR loans sometimes allow 1.00 or even no-ratio. Taxes and insurance are usually carved out for a strict P&I-only ratio; confirm with your lender.
How to Use
- Enter annual Net Operating Income (gross rent minus all operating expenses, before mortgage).
- Enter the monthly principal-and-interest payment.
- Set the lender's target coverage minimum (1.20–1.25 is typical; 1.30+ for riskier deals).
- Read your coverage ratio and whether it clears the target. See the max monthly payment the property would support at your ratio.
Frequently Asked Questions
Is this the same as DSCR?
Yes — Debt Service Coverage Ratio is the standard name in commercial and DSCR loan underwriting. 'Loan coverage ratio' is a broader term that sometimes includes T&I, but is most often used interchangeably with DSCR.
What counts as NOI for this ratio?
Effective gross income (gross rent less vacancy) minus operating expenses: property tax, insurance, management, repairs, utilities paid by landlord, HOA. Exclude mortgage principal and interest, depreciation, and capex.
What's a good coverage ratio?
1.25 is the long-standing conventional commercial minimum. 1.40–1.50 is comfortable. Below 1.0 means the property can't cover its own debt — a lender would either deny the loan or require personal-income ratio qualification.
Do lenders include T&I in debt service?
Policies vary. Some strict lenders use PITIA (principal, interest, tax, insurance, association) in the denominator, producing a stricter ratio. Others use only P&I (like this calculator by default). Always confirm with your lender.
Related Calculators
DSCR Calculator
Detailed version with full PITIA treatment.
DSCR Loan Calculator
Qualify a DSCR loan without W-2 income.
Net Operating Income Calculator
Build NOI from rent and operating expenses.
Cap Rate Calculator
Property-level return before financing.
Rental Property Calculator
Full deal analysis with cash flow and return metrics.
Debt Yield Calculator
Alternative lender ratio: NOI ÷ loan amount.
More Finance Calculators
Browse all finance →AI Cost Calculator
Compare token costs across OpenAI, Anthropic, and Google AI models. Calculate monthly API spending for GPT-4o, Claude, Gemini, and more.
Tip Calculator
Calculate the perfect tip and split the bill between friends. Choose preset percentages or enter a custom tip amount.
Bill Splitter Calculator
Split an uneven restaurant bill by item, divide tax and tip proportionally, and see exactly who owes whom.
Discount Calculator
Calculate sale price, discount amount, stacked discounts, sales tax, and total savings for any markdown.
Gas Mileage Calculator
Calculate MPG or km/L, estimate trip fuel cost, and compare annual fuel expenses between two vehicles.
Sales Tax Calculator
Add sales tax to a price, reverse-calculate the pre-tax amount from a total, and estimate tax for multiple items on one receipt.
Keep exploring
Next steps in Finance
Previous calculator
Loan Calculator
Calculate monthly payments, total interest, and total cost for any loan. Visual pie chart shows principal vs. interest.
Next calculator
Loan Modification Calculator
Compare rate reduction, term extension, and principal forbearance options on a loan modification to see monthly and total-cost impact.