Published July 8, 2026
DSCR is monthly rent divided by the full mortgage payment, taxes and insurance included: a $225,000 loan at 7.25% over 30 years runs about $1,535 a month in principal and interest, and against $2,400 in rent with taxes and insurance folded in, this calculator returns a DSCR of 1.24. A DSCR loan is priced almost entirely off that ratio rather than your personal income, which is what makes it a common financing route for landlords who already own several properties and no longer show a clean W-2 for a traditional lender to underwrite.
What actually sets the payment and the ratio
Three things drive the monthly payment: loan size, rate and term. Loan size comes straight from price minus down payment, and a bigger down payment is the one lever fully in a buyer's control. Rate is set by the market and by your own file, credit score, reserves, and whether the lender treats this as a DSCR loan or a conventional investment loan with full income documentation. Term stretches or compresses the payment without changing the total amount borrowed.
DSCR moves differently. It only cares about two things: what the property collects in rent and what the full payment, principal, interest, taxes, insurance and any HOA, actually costs each month. Nothing about your salary, your other properties, or your personal debt shows up in the ratio, which is exactly why DSCR lending exists as its own category separate from a standard owner-occupied mortgage.
Running the numbers on a $300,000 purchase
Start with 25% down on a $300,000 property. That is $75,000 down and a $225,000 loan. At 7.25% over 30 years, the principal and interest payment comes out to roughly $1,535 a month. Add $300 in monthly property taxes and $100 in monthly insurance, with no HOA in this example, and the full payment climbs to $1,935 a month. Against $2,400 in monthly rent, that works out to a DSCR of 1.24, just under the 1.25 mark that many lenders treat as the strong-file threshold.
A small change moves that ratio more than it might seem. Raise the down payment to 30% instead of 25% and the loan shrinks to $210,000, which drops the P&I payment to roughly $1,433 and pushes the full payment down near $1,833. Against the same $2,400 in rent, DSCR climbs to about 1.31, safely past the strong-file line. That is the practical lever most investors reach for first when a deal's DSCR comes in short: put more cash down rather than chase a slightly better rate.
Where this estimate falls short of a real quote
This calculator uses a standard 30-year amortization formula and a flat rate you supply, not a live lender quote. Actual investor pricing adds loan-level adjustments for credit score, loan-to-value, property type and the number of units, on top of the base premium over an owner-occupied rate. Closing costs, prepaid interest and any lender reserve requirement, often six months of payments for a DSCR loan, are not reflected here either. Treat the payment and DSCR figures as a planning range to walk into a lender conversation with, not a locked number.
FAQ
How much higher are investment property mortgage rates than owner-occupied rates?
According to The Mortgage Reports (July 2026), investment property mortgage rates typically run 0.5 to 1 percentage point higher than rates on a primary residence. The exact spread depends on credit score, down payment size, property type and the number of units, so treat this as a planning range rather than a quote.
What DSCR do I need to qualify for a rental property loan?
Most DSCR lenders want a minimum of 1.0 to 1.25, meaning the property's rent covers its full monthly payment with little to nothing left over, according to New American Funding. A DSCR of 1.25 or higher is generally treated as a strong file and can help with pricing; some lenders will go as low as 0.75 to 1.0 with a larger down payment or a rate adjustment.
Can I use projected rent instead of a signed lease to qualify?
Many DSCR lenders will accept a market rent estimate from an appraiser's comparable-rent schedule for a vacant property, not just a signed lease. A current lease at or above market rent is still the strongest documentation, since it removes any dispute over what the unit can actually command.
How much down payment does an investment property loan require?
Conventional investment property loans commonly require 15 to 25 percent down, higher than the 3 to 5 percent minimums available on an owner-occupied purchase. DSCR loan programs often sit in a similar 20 to 25 percent range, sometimes higher for a lower credit score or a first investment purchase.