DSCR - Debt Service Coverage Ratio Calculations

While there are a number of websites that show how to calculate the DSCR, or Debt Service Coverage Ratio, used by lenders to make commercial mortgage decisions, it's not going to be the direction a buyer wants to take in evaluating a property for purchase.

While we need to use DSCR when looking at an apartment or multifamily project, we're more likely to want to see what we may be able to borrow to buy it, rather than what the DSCR is for the current mortgage. In this DSCR calculation example, I'll show you how to do it both ways, but with more emphasis on how to determine, with a minimum DSCR a lender will use, how much can be borrowed.