Debt service coverage ratio (DSCR)
Also called DSCR, DSCR ratio, debt coverage ratio. Last reviewed Oct 21, 2026 by Jeremy Werden
The debt service coverage ratio (DSCR) compares a rental's yearly operating income with its yearly loan payments: at 1.25, income covers the debt one and a quarter times. BNBCalc shows it on Buy analyses of US homes, counting property tax and mortgage insurance with the loan, and labels 1.25 or more Strong.
DSCR = yearly operating income ÷ yearly Mortgage & Taxes
How does BNBCalc calculate DSCR?
On a Buy analysis of a US home, the DSCR Ratio in the Cash Investment card is year-one operating income ÷ (Mortgage & Taxes × 12), where Mortgage & Taxes is your monthly loan payment plus property tax, plus mortgage insurance if you put down less than 20%. BNBCalc then labels the result:
| DSCR | Label |
|---|---|
| 1.25 or more | Strong |
| 1.0 to just under 1.25 | Acceptable |
| Under 1.0 | Weak |
Take a $400,000 home with $32,220 of operating income and $26,983 a year of Mortgage & Taxes. Its DSCR is $32,220 ÷ $26,983 = 1.19, which BNBCalc labels Acceptable.
Since cash flow in BNBCalc is operating income minus Mortgage & Taxes, a DSCR under 1.0 means the same thing as negative cash flow: the home's income doesn't cover its loan, tax and insurance payments. If you're paying cash, there's no loan to cover, so you can set the DSCR aside and look at cash flow and cap rate instead. To check a DSCR outside an analysis, for a home you already own for example, BNBCalc's free DSCR mortgage calculator works it out from your loan, income and expenses.
What is a good DSCR for an Airbnb?
By BNBCalc's labels, 1.25 or more is strong, which leaves a cushion of a quarter of your loan payments for a slow season or a surprise repair. Between 1.0 and 1.25 the home covers its debt, but with little room to spare.
If you're applying for a DSCR loan, keep in mind that lenders set their own minimums and decide for themselves which income and costs to count, so ask yours how it works out the ratio for a short-term rental.
Where else will I see a DSCR?
The Long Term Rental view of a Buy analysis has its own DSCR, which divides the long-term rental's operating income by principal and interest only, so don't compare it directly with the short-term figure. The printed report shows the DSCR on its Mortgage & Taxes card.