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How is DSCR calculated for a mortgage?

Short answerDSCR equals the property’s monthly rent divided by its full monthly payment: principal, interest, taxes, insurance and HOA dues (PITIA). Rent of $2,400 on a $2,000 PITIA gives a DSCR of 1.20.
Reviewed by Juan Fernando Romero, NMLS 2557318Updated

The details

Lenders use the lease or the appraiser’s market rent, whichever their guideline requires (often the lower). Most want 1.00 or higher; higher ratios usually get better pricing.

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