Mezz Last Dollar Coverage Calculator

Last-dollar coverage measures ability to service the entire capital stack.

NOI

Senior debt service

Mezz debt service

Last-dollar DSCR

1.143

Senior DSCR

1.455

Combined debt service

$2,800,000

How the math works

Last-dollar DSCR = NOI / (senior + mezz debt service).

$3.2M / ($2.2M + $600k) = $3.2M / $2.8M = 1.14× last-dollar DSCR.

How to Use

Enter annual NOI.
Enter senior debt service.
Enter mezz debt service.
Read last-dollar DSCR.

Frequently Asked Questions

Last-dollar coverage?

DSCR calculated against senior + mezz combined debt service. More conservative than senior-only DSCR. Typical lender minimum: 1.05-1.15× last-dollar. Below indicates risk of mezz payment default.

Mezz economics?

Senior debt 4-6% rate. Mezz 8-14% rate. Mezz debt service materially higher than senior. Combined DSCR falls much more than senior alone. Structure mezz with PIK option (pay-in-kind) to reduce current DSCR burden.

Risk allocation?

Senior secured by property. Mezz typically secured by equity pledge or cash flow only. Mezz takes first loss in default. Senior protected unless DSCR sub-1.0×. Mezz investors need higher return to compensate.

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.