Refi Rate Shock Calculator

Rates can rise between funding and maturity. This calculator stresses the refi rate and measures the DSCR hit.

Refi balance

Base rate %

Rate shock (bps)

NOI

Amort years

Stressed DSCR

1.38

Stressed debt service

$1,227,917

DSCR delta

0.15

How the math works

Stressed DSCR = NOI ÷ debt service at (base rate + shock). Delta shows coverage lost.

Under-1.20x stressed DSCR = cash-in refi territory. Over-1.30x base but under-1.20x stressed = consider rate cap or forward lock now rather than re-underwrite later.

How to Use

Enter projected refi balance.
Enter base refi rate.
Enter rate shock in basis points.
Enter NOI and amortization.
Read stressed DSCR.

Frequently Asked Questions

Reasonable shock?

50-100 bps for near-term refis in quiet markets. 150-300 bps for longer-dated refis or rate-volatility environments. Use the FOMC dot plot + term premium as an anchor.

DSCR hit per 100 bps?

On a 30-year amort, each 100 bps costs roughly 0.10-0.15x of DSCR at moderate coverage levels. A 1.30x DSCR becomes 1.15-1.20x under a 100-bp shock.

Mitigation?

Rate cap purchase at origination. Forward rate lock. Interest-only period. Larger amortization schedule. Keep senior lender room for mezz layer to preserve proceeds under rate stress.

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.