Debt Coverage Ratio
This calculates the debt coverage ratio of an income property. Enter the net operating income (NOI). Enter the annual debt service (total loan payments for the year).
Please do not use percentage or dollar characters or commas in the calculator.
ExampleThe property you are buying has an estimated NOI of $71,914 in the first year. The loan payment will be $5,364/month. What's the debt coverage ratio? It's 111.7%. This is usually referred to as 1.117 (that is 1.117:1). Round to 1.12. Will the Property Pay the Loan?This is the ratio between the annual debt service and the NOI. Lenders use this as part of their underwriting criteria. The debt coverage ratio determines the upper limit on the amount that they will loan on the property. Formula: NOI ÷ Annual Debt Service |