DSCR calculator for properties and businesses.
Debt service coverage the way a lender reads it: the income against the payments, the maximum loan at your lender's target, the loan-to-value cap, a stressed rate, and which of the three ceilings actually binds. Switch to business mode to test an owner-user file against every facility in the package.
Net operating income (NOI)
Everything the property collects in a year, less vacancy and the cost of running it. The mortgage is not an operating expense: it is what the NOI has to cover.
The loan
Monthly compounding is the commercial suite's convention and matches most commercial quotes. Pick semi-annual for a bank mortgage quoted the Canadian way; the payment comes out slightly lower at the same rate.
The lender's box
Three ceilings decide the loan: the DSCR the lender wants, its loan-to-value cap, and, if it tests at a higher rate, the DSCR at that rate. Set them from your lender's letter or leave the defaults to see the shape.
What the lender can advance
The ceiling that binds here is DSCR at the contract rate. Each ceiling is the largest loan that still meets that one test; the lender advances the lowest of them.
Cushion and other reads
If the rate moves
| Rate | Annual debt service | DSCR |
|---|---|---|
| 5.25% | $120,808 | 1.24× |
| 6.25% (contract) | $132,989 | 1.12× |
| 7.25% | $145,718 | 1.03× |
| 8.25% | $158,952 | 0.94× |
- Two modes in one tool: an income property's NOI against its mortgage, or an owner-user business's earnings against every facility in the package — term loans, the leasehold loan, the operating line, the cards
- Computes all three lender ceilings — the max loan at the target DSCR, at a stressed rate, and under the loan-to-value cap — and names the one that binds, with the equity needed to close the gap
- Monthly or semi-annual compounding, principal-and-interest or interest-only, so the payment matches the quote in front of you rather than a generic one
- Shows the cushion in dollars: how far NOI or cash flow can fall before the file drops below the target, plus debt yield and a rate sensitivity table
Have the lender's box tested on your real numbers
A calculator estimates. We read the statements, size every facility in the package and tell you which lenders' boxes the file fits before anything is submitted. Free, no obligation, same-day reply.
Get my file readNo credit pull · No spam · Reply within hours
Case Studies — files like this
Anonymized case studies from our files. Names and identifying details removed.
- Case study · Commercial / Business FinancingThe Branch Offered $2,000. We Arranged a $1.1M Daycare Financing Package.Its bank branch offered a $2,000 corporate-card increase. A complete commercial submission brought an approved and signed package of about $1.1 million: leasehold improvements, equipment, operating credit, business credit cards and existing debt consolidation.Read the file →
- Case study · Commercial / HealthcareFour Credit Facilities. No Client Cash Down. One Medical Clinic.A North Shore medical clinic needed real estate, leasehold and operating financing. We arranged four coordinated credit facilities with no client cash used for the down payment, and the three loans priced under 5%.Read the file →
- Case study · CommercialStructuring a Private Commercial Mortgage to Clear ~$7M in CRA Tax DebtDone right, a structure like this clears the CRA debt for a fraction of the alternatives and buys time to refinance into lower-cost lending once the pressure lifts, on terms a CPA can approve.Read the file →
How the DSCR calculator works
DSCR = income available for debt service ÷ annual debt service. Debt service is twelve monthly payments on the loan, principal and interest over the amortization or interest only, at monthly compounding (the commercial convention) or Canada's semi-annual mortgage convention. The ratio tells a lender how much cushion sits between the income and the payments.
The maximum loan, and the ceiling that binds
Turn the ratio around and it sizes the loan: the largest principal whose payments equal the income divided by the target DSCR. The lender's loan-to-value cap is a second ceiling, and a stressed rate, if the lender tests at one, is a third. The calculator computes all three and names the lowest, because that is the number the lender writes, and shows the extra equity that closes any gap to the loan requested.
Business mode: the whole package
An owner-user file is carried by the operating company, so the test is its earnings against everything it owes. Start from pre-tax income, add back interest, depreciation and amortization, apply the adjustments a lender would, then deduct cash taxes, capital spending the business paid for itself and owner draws. Against that sit the term loans, the leasehold improvement loan, the operating line and the cards, each with its own payment. The calculator shows coverage on both the adjusted EBITDA and the cash-flow line, the debt service facility by facility, and how much more term debt the earnings could carry at the target.
Also see: Cap rate, NOI & cash-on-cash → · EBITDA & valuation → · Commercial mortgage payment → · Commercial financing →
DSCR questions, answered
What is DSCR and how is it calculated?+
The debt service coverage ratio is the income available to pay a loan divided by the loan's annual payments. On an income property that is NOI ÷ annual debt service; for an owner-user business it is the earnings a lender credits (adjusted EBITDA, or the cash flow left after taxes, unfinanced capital spending and draws) ÷ the annual payments on every facility. A ratio of 1.00× means the income exactly covers the payments; 1.25× means a 25% cushion.
What DSCR do commercial lenders want?+
It depends on the lender, the asset and the program, which is why the target here is an input rather than a rule. Our commercial page describes conventional lenders at roughly 1.20× to 1.35× and CMHC MLI Select at 1.10×; owner-user programs are often written around 1.25×. Set the target to the figure in your lender's letter and the calculator shows whether the file clears it and by how much.
What is the difference between property DSCR and business DSCR?+
Property DSCR tests the building's own income, NOI, against its mortgage. Business DSCR tests the operating company's earnings against everything it owes: the mortgage or term loan, a leasehold improvement loan, the operating line, the cards. An owner-user file is usually underwritten the second way, because the business, not a tenant, pays the loan.
Why does the calculator say the loan-to-value cap or the stress rate is what binds?+
A lender runs three tests and advances the smallest answer: the largest loan the income covers at the target DSCR, the largest loan its loan-to-value ceiling allows, and, where it tests at a higher rate, the largest loan the income covers at that rate. The calculator computes all three, highlights the lowest, and shows the equity needed to close any gap.
Does an interest-only payment improve DSCR?+
Mechanically yes, because the annual payment is smaller, and the calculator will show it. A lender may still test the file on an amortizing payment, or at a higher rate, so treat an interest-only DSCR as the cash-flow picture rather than the approval test unless the lender has said otherwise.
Monthly or semi-annual compounding: which should I choose?+
Most commercial quotes compound monthly, which is this suite's convention and the default. A bank mortgage quoted the Canadian way compounds semi-annually, which makes the payment slightly lower at the same rate. Pick whichever your quote uses; the difference is small but real on a large loan.
Every calculator here is built on published Canadian government rules and lender methodology, and was last checked for accuracy on August 1, 2026 — the arithmetic re-verified and every page re-read on screen. Rates and thresholds change — we confirm the current numbers for your file before you rely on them.