DSCR loan math
How to Calculate Loan Amount Using DSCR
The coverage test runs forward: eligible rent ÷ PITIA. Max loan runs the same formula backward. This page shows the inversion, a worked example, and the calculator in Max loan mode — not a third calculator URL. Compare typical metro rent gaps on the DSCR Investor Index, then invert a specific rent here.
- Max PITIA = eligible rent ÷ target DSCR
- Then subtract taxes, insurance, and HOA
- Solve the leftover payment for principal
- Cap the result by LTV when a price is known
DSCR loans are for business-purpose investment properties only, not a primary residence.
Stride Bank, N.A. · NMLS #466690 · Equal Housing Lender
The two formulas
Residential DSCR loans used for 1–4 unit rentals commonly compare eligible monthly rent with PITIA (principal, interest, taxes, insurance, association dues). That is different from a commercial DSCR loan calculator, which often uses annual NOI ÷ annual debt service. Loan sizing here takes the lower of the DSCR-supported principal — including a higher test-ratio target on a 30-year payment — and the LTV cap. Interest-only raises the DSCR-only principal because the payment excludes principal reduction. This page stays on that residential inversion rather than a commercial spreadsheet.
1. Coverage (forward)
DSCR = eligible monthly rent ÷ PITIA
Use this when you already have a price, down payment, and estimated payment. It is the default mode on the DSCR loans hub calculator.
2. Max loan (backward)
Max PITIA = eligible monthly rent ÷ target DSCR
Max P&I = max PITIA − taxes − insurance − HOA. Convert that payment to principal, then take the lower of the DSCR-supported loan and value × max LTV.
Worked example
Same starter scenario used on the hub: $3,200 gross rent, 5% vacancy, $350 taxes, $150 insurance, 7.25% illustrative 30-year rate, $425,000 price, 80% max LTV.
- Eligible rent. $3,200 × (1 − 5%) = $3,040.00.
- Max PITIA at 1.00 DSCR. $3,040.00 ÷ 1.00 = $3,040.00.
- Max P&I. $3,040.00 − $350 − $150 = $2,540.00.
- DSCR-only principal. That payment at 7.25% / 30 years supports about $372,338.
- LTV cap. 80% of $425,000 is $340,000. The binding max loan is $340,000 (LTV binds).
| Target DSCR | Max PITIA | DSCR-only loan | After illustrative LTV cap |
|---|---|---|---|
| 1.00 | $3,040.00 | $372,338 | $340,000 |
| Higher test ratio | $2,533.33 | $298,066 | $298,066 |
A higher test-ratio target shrinks payment room, so the DSCR-only loan falls from $372,338 to $298,066. That is the tradeoff investors model before they offer.
Max loan calculator
Same engine as the hub. Switch to Analyze coverage if you already have a loan amount. Interest-only is on this mode so you can see how a lower payment changes the inverted principal.
Max DSCR Loan Amount
Invert eligible rent and a target DSCR to estimate max loan. Interest-only is available on this mode.
Scenario
Your assumption. Not a National Mortgage Center rate or APR.
Target DSCR
Caps the DSCR-supported loan against property price
Simple mode uses a 5% vacancy allowance and a $150 maintenance estimate. Open Advanced for vacancy, HOA, flood insurance, and operating expenses.
DSCR loans are for business-purpose investment properties only, not a primary residence.
Illustrative max loan
$298,066
Supported by 1.20 lender-style DSCR before any LTV cap.
Educational estimate — not an approval or rate quote.
Eligible monthly rent
$3,040.00
Max PITIA at target
$2,533.33
Max principal & interest
$2,033.33
DSCR-only max loan
$298,066
LTV-capped max loan
$340,000
Cash needed if price is used
$126,934
Max loan by target DSCR
1.00
$340,000
1.10
$331,826
1.15
$314,212
1.20
$298,066
1.25
$283,211
Interest-only vs amortizing
Same rent and target DSCR. Interest-only lowers the monthly debt service, so the inverted principal is higher — pricing and qualification still differ.
Amortizing max (DSCR only)
$298,066
Interest-only max (DSCR only)
$336,552
Full walkthrough: How to calculate DSCR loan amount.
Interest-only vs amortizing
Interest-only PITIA uses rate × balance instead of a fully amortizing P&I. On the starter scenario, a 1.00 target supports about $420,414 interest-only versus $372,338 amortizing — before the LTV cap. That larger IO principal is why some investors model IO to make a thin rent file look workable. It is still not an approval, and IO pricing differs.
See DSCR loan rates for what typically moves pricing, including structure.
What the max-loan number does not decide
Inverting DSCR answers “how much payment can this rent support?” Lenders still review credit, reserves, occupancy, property type, lease or rent-schedule documentation, and whether the file is purchase, rate/term, or cash-out. Typical market ranges — scenario dependent for loan size and down payment — live on the DSCR loan requirements guide.
Gross rent is not automatically qualifying income. Many purchase files use the lesser of lease rent and the appraisal rent schedule, as required by the lender. Short-term rental income often has a stricter path.
DSCR loan amount questions
Eligible monthly rent after vacancy, divided by the target DSCR, is the maximum PITIA. Subtract taxes, insurance, and HOA. Solve the remaining payment for an illustrative principal at the stated rate and term. An LTV cap can still bind below that DSCR ceiling.
Part of the DSCR Loans pillar
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DSCR Loans Hub
Analyze a rental, explore financing, and learn how DSCR loans work.
Open hubDSCR Loan Calculator
Estimate coverage, max loan, PITIA, and cash flow on this page.
CalculateDSCR Loan Rates
What moves DSCR pricing. This page does not publish a rate or APR.
See pricing factorsDSCR Requirements
Credit, LTV, reserves, and documentation checklist.
See requirementsDSCR Cash-Out Refinance
Access equity from an investment property.
Explore cash-outShort-Term Rental DSCR
Airbnb and vacation rental financing paths.
STR guideDSCR Investor Index
Modeled DSCR coverage across 30 U.S. metros from July 2026 housing data.
Open index