Debt Service Coverage Ratio — for commercial real estate.
Calculate the DSCR on any commercial deal in seconds, or solve for the maximum supportable loan at your target DSCR. Built for CRE, multifamily, hotel, SBA, and bridge underwriting.
Current market rates Live
For context only — your deal pricing depends on lender, asset class, sponsor, and structure.
As of
- Prime
- 6.75 %
- SOFR
- 3.63 %
- 3-Yr UST
- 4.16 %
- 5-Yr UST
- 4.23 %
- 10-Yr UST
- 4.49 %
Prime Rate (WSJ)
Base rate banks charge their most creditworthy customers; reference for LOCs + many small-balance commercial loans.
Source: FRED →SOFR
Secured Overnight Financing Rate — replaces LIBOR; reference for most floating-rate commercial real estate debt.
Source: FRED →3-Year Treasury Yield
Benchmark for short-term fixed-rate CRE bridge & mini-perm financing.
Source: FRED →5-Year Treasury Yield
Benchmark for 5-year fixed-rate CRE term loans; common SBA 504 pricing reference.
Source: FRED →10-Year Treasury Yield
Benchmark for 10-year CRE fixed-rate loans, CMBS, and most permanent commercial debt.
Source: FRED →Sources: CNBC (Treasury yields), NY Federal Reserve (SOFR), WSJ (Prime Rate). Auto-refreshed daily. Hover any tile for source link.
How to use the DSCR calculator
The DSCR calculator runs in two modes:
- Calculate DSCR — enter your property's NOI, loan amount, and loan terms. We return your DSCR plus a pass/fail check against the thresholds most lenders use (1.20× / 1.25× / 1.30×).
- Max loan at target DSCR — enter your NOI and the DSCR your lender is underwriting to (typically 1.25×). We solve for the largest loan amount that still meets that ratio at the given rate and amortization.
The DSCR formula
DSCR = Net Operating Income ÷ Annual Debt Service
A DSCR of 1.0× means the property generates exactly enough income to cover loan payments — with zero buffer. A DSCR of 1.25× means the property earns 25% more than it needs. Most CRE lenders require at least 1.20–1.25× before they'll fund the loan.
What goes into NOI
NOI is the property's income after operating costs, but before debt service, capital expenditures, depreciation, or income taxes. The formula is:
NOI = Gross Potential Income × (1 − Vacancy) − Operating Expenses
Operating expenses include property management, repairs & maintenance, insurance, property taxes, utilities (if landlord-paid), and reserves. Mortgage interest is not an operating expense for NOI purposes. Use the calculator's "Build NOI" toggle to construct it from raw inputs.
DSCR thresholds by asset class
Typical minimum DSCR by property type and execution:
- Multifamily (agency — Fannie / Freddie): 1.20×
- Multifamily (bank / debt fund): 1.25×
- Office, retail, industrial (stabilized): 1.25×
- Mixed-use: 1.25–1.30×
- Hotel — limited service: 1.30–1.40×
- Hotel — full service / boutique: 1.35–1.50×
- Self-storage: 1.20–1.25×
- Bridge / value-add: 1.10–1.20× at close, with proforma DSCR ≥ 1.25× at stabilization
Limits of this calculator
DSCR is one of three tests lenders run — the others are LTV (loan-to-value) and debt yield (NOI ÷ loan amount). A deal may pass DSCR but fail one of the others. Use this calculator as a directional check; the full underwriting requires the property's tax returns (T-12), rent roll, and recent appraisal.
Ready to underwrite the full deal? Submit it to Caplli — we'll match it against current lender appetite across our 500+ lender network and typically have term sheets within 5–10 business days.
DSCR — frequently asked questions
What is DSCR in commercial real estate?
DSCR (Debt Service Coverage Ratio) is the ratio of a property's annual net operating income (NOI) to its annual debt service. A DSCR of 1.25× means the property generates 25% more income than is needed to cover the loan payments. Lenders use it as the primary cash-flow test when underwriting commercial real estate loans.
What is a good DSCR for a commercial real estate loan?
Most lenders require a minimum DSCR of 1.20× to 1.25× for stabilized commercial real estate. Multifamily deals (especially agency Fannie/Freddie) can underwrite to 1.20×. Standard CRE typically requires 1.25×. Hotels and value-add deals usually need 1.30–1.40× because of operating volatility. Anything above 1.50× is considered strong coverage.
How do you calculate DSCR?
DSCR = Net Operating Income ÷ Annual Debt Service. NOI is the property's gross income minus vacancy and operating expenses (not including loan payments or capital expenditures). Annual debt service is the total of principal and interest payments for the year. For interest-only loans, debt service is just the annual interest.
What DSCR do I need for an SBA loan?
SBA lenders typically require a global DSCR of 1.15× to 1.25×, calculated across both the business operating income and the borrower's other personal/business cash flow. For SBA 7(a) and 504 loans secured by owner-occupied real estate, lenders also examine the business's ability to service the debt on a standalone basis.
Can I get a commercial loan with a DSCR below 1.0?
Conventional bank and agency lenders will generally decline deals with DSCR below 1.0× because the property doesn't cover its own debt. Bridge lenders and private capital may still fund the deal if there's a credible value-add plan that will bring DSCR above 1.20× within 12–24 months — but expect higher rates (asset-based pricing) and shorter terms.
How do I improve the DSCR on a deal?
Three levers: (1) Increase NOI — raise rents to market, reduce operating expenses, or capture vacancy. (2) Reduce loan size — lower the loan amount or contribute more equity. (3) Reduce debt service cost — find a lower rate, longer amortization, or an interest-only period during stabilization.
Pencils out on a real deal?
Caplli will run the full underwrite — DSCR, LTV, debt yield, sponsor liquidity, market — and match the deal to lenders with current appetite. Term sheets in 5–10 business days.