Mezz Coverage Ratio Calculator

Mezz has its own coverage. This calculator computes.

NOI

Senior debt service

Mezz debt service

Mezz DSCR

1.56

All-in DSCR

1.16

Residual after mezz

$250,000

How the math works

Mezz DSCR = (NOI − senior DS) / mezz DS. All-in = NOI / (senior + mezz).

$1.8M NOI, $1.1M senior, $450k mezz: mezz DSCR 1.56, all-in 1.16. Covenant likely 1.10 all-in — meets with cushion. Residual $250k to equity.

How to Use

Enter NOI.
Enter senior debt service.
Enter mezz debt service.
Read mezz and all-in DSCR.

Frequently Asked Questions

Mezz DSCR?

(NOI − senior DS) / mezz DS. Tests whether residual cash flow covers mezz. Institutional mezz: 1.15-1.35. Pref equity: 1.05-1.15. Below 1.10: tight cushion, likely pay-in-kind accrual triggered.

All-in DSCR?

NOI / (senior DS + mezz DS). Tests total debt service coverage. Institutional: 1.10-1.25 all-in. Aggressive: 1.05-1.10. Sub-1.0: cash shortfall, either pay-in-kind accrual or default.

Cushion target?

Minimum 15% cushion (1.15 DSCR). 30-50% (1.30-1.50 DSCR) for value-add lease-up. Covenants at 1.15; actual 1.25-1.30 target. Build buffer for NOI volatility.

How does this interact with the rest of the capital stack?

Each tier of the stack affects the next. Senior debt constrains LTC and DSCR. Mezz and pref consume equity spread. Interest rate hedges protect DSCR but cost premium. Always model the full stack holistically — optimizing one tier alone often degrades another. Institutional underwriters run three or four scenarios across the stack before committing capital.