Does the property cover itself?
DSCR calculator
On a DSCR loan the property qualifies, not you. The whole underwrite comes down to one ratio — and to a detail nobody mentions until it costs you: whether vacancy is deducted before it is worked out.
A coverage ratio is two numbers on the day you sign. It knows nothing about a boiler, a void month, or a letting agent's fee, and it is not a measure of whether the property is a good investment.
Your inputs
The property
DSCR programmes usually want 20% to 25%, and price better the further above that you go.
Carrying it
The rent
Usually the lower of a signed lease and the appraiser's rent schedule.
Set it to what your lender actually applies. Most apply none — which is why the ratio looks better than the property does.
Your result
Coverage ratio
1.03
on gross market rent, with no vacancy allowance
The housing payment (PITIA)
Against the rent
The dashed line is 1.00 — where the rent exactly covers the payment. Programme tiers usually sit at 1.00, 1.15 and 1.25.
Take this with you
Every number you entered is in the address bar. Copy the link and it opens with your inputs restored — that is how everything else here shares.
What this assumes
- DSCR is qualifying rent divided by principal, interest, taxes, insurance and association dues. Nothing else enters it.
- Vacancy is applied to the rent before the division, if you set one. Whether your lender does is a question worth asking in writing.
- Taxes and insurance are the figures you typed. Insurance on a let property is not the same product as owner-occupier cover, and is usually dearer.
- No maintenance, no management fee, no capital expenditure, no void periods. The lender's ratio ignores all four, and so does this — which is exactly why it should not be the only number you look at.
- An interest-only start would raise the ratio substantially while it lasts and is not modelled.
Demonstration form
Have someone look at it
If this were a working site, this is where the conversation would start.