Tool
Run the ratio yourself
Six numbers and a rate you supply. The calculator divides the rent by the full monthly carrying cost, then tells you what the result usually means to a wholesale lender.
Property numbers
This tool does not quote rates. Use the rate a wholesale lender or your own quote sheet shows for the scenario you are modeling; the calculator only does the arithmetic.
Debt service coverage ratio
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Waiting on a rate
Enter the rent, the monthly carrying costs, the loan amount and a rate to see the ratio. The rate field is intentionally blank: we do not publish rate quotes here.
- Principal and interest
- enter a rate
- Taxes
- $0
- Insurance
- $0
- HOA
- $0
- Total monthly carrying cost
- $0
- Rent minus carrying cost
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The color bands are a reading aid, not program cutoffs. Ratio = monthly rent divided by total monthly carrying cost. It ignores vacancy, management, maintenance, taxes on income, and the cost of capital. A lender will underwrite its own numbers, and its rent figure may be lower than yours.
What the ratio does and does not tell you
The ratio answers one question: does the rent cover the monthly cost of owning the property, and by how much? That is the question a DSCR lender starts with. It is not the only question, and the calculator is deliberately narrow.
It does not include vacancy, property management, maintenance, pest control, lawn care, income taxes or the cost of the capital you put down. Those are real costs, and a property that covers its payment with nothing left over is not covering its life. Treat the ratio as the lender’s first test, not your own final one.
It also does not quote a rate. We are a mortgage broker and we do not publish rate quotes on this site. Enter the rate you are modeling — from a lender quote, a term sheet, or your own assumption — and the calculator will do the arithmetic.
Why the tax and insurance fields matter so much in Alabama
Investment property in Alabama is assessed at a higher ratio than an owner-occupied homestead, so the seller’s tax bill is not the number you will pay. On the coast, insurance can carry a wind deductible written as a percentage of the dwelling limit, and flood is a separate policy. Those two lines can change the ratio more than a small change in the rate.
If you want a second opinion on the inputs, send us the address. We will model it with the actual parcel tax bill and a realistic insurance estimate, and tell you which programs the numbers support.
Reading the result
- Below 1.00 — the rent does not cover the carrying cost. Many programs will not consider the property at that leverage, and the ones that do ask for more equity.
- 1.00 to 1.20 — thin coverage. Some programs will work with compensating factors; expect a larger down payment.
- 1.20 to 1.35 — moderate coverage, where many rental programs are comfortable.
- Above 1.35 — comfortable coverage, with room for vacancy and repairs.
These bands are a plain-English reading aid, not any lender’s official program cutoffs and not a promise that any specific program will approve a specific property. Every lender sets its own floor and its own rent estimate.
What lenders may use instead of your number
The appraiser’s market rent survey, the actual tax bill, and an insurance quote for the address. If those differ from what you entered, the lender uses its own figures.
Prefer to talk it through? Start a file and send the address.
This page is educational. It is not a loan offer, a rate quote, or a commitment to lend. Business-purpose financing for non-owner-occupied investment property only.
Next step
Want the ratio checked against real programs?
Send the address, the rent you expect and the loan amount. We will model it with the actual tax bill and a realistic insurance quote, then tell you honestly what fits.