DSCRRENTAL FINANCING · PURCHASE PLANNING
DSCR loan down payment calculator
Work backward from rent to a supported loan amount. This calculator combines your coverage target with a maximum loan-to-value limit to estimate the larger down payment your assumptions require.
Uses residential gross rent ÷ PITIA: principal, interest, property taxes, insurance and association dues. The result estimates coverage, not loan approval or cash flow.
ESTIMATED DOWN PAYMENT
$92,568.27
26.45% of purchase price
The DSCR target requires more down than the LTV limit.
- Supported loan
- $257,431.73
- Monthly principal & interest
- $1,800.00
- Monthly PITIA
- $2,400.00
- Resulting DSCR
- 1.25×
- Binding constraint
- DSCR target
Down payment only. Closing costs, points, prepaid items, lender reserves, repairs and other cash requirements are excluded. Lender loan-size limits and property eligibility can change the outcome.
How the DSCR target changes your down payment
Each row uses the current property and financing inputs, changing only the target coverage ratio. A higher target leaves less rent available for the mortgage payment.
| Target DSCR | Supported loan | Down payment | Binding constraint |
|---|---|---|---|
| 1.00× | $280,000.00 | $70,000.00 | Maximum LTV |
| 1.10× | $280,000.00 | $70,000.00 | Maximum LTV |
| 1.20× | $271,733.49 | $78,266.51 | DSCR target |
| 1.25× | $257,431.73 | $92,568.27 | DSCR target |
| 1.30× | $244,230.10 | $105,769.90 | DSCR target |
| 1.40× | $220,655.77 | $129,344.23 | DSCR target |
The method, with a worked example
For the default $350,000 purchase, $3,000 monthly rent and 1.25× target, the maximum monthly PITIA is $3,000 ÷ 1.25 = $2,400. Taxes of $400 per month and insurance of $200 leave $1,800 for principal and interest.
At a fixed 7.5% annual interest rate amortized over 30 years, each borrowed dollar requires about $0.006992 per month. Dividing the $1,800 payment budget by that factor supports a loan of $257,431.73. An 80% LTV limit permits $280,000, so the smaller DSCR-supported loan controls. The purchase price minus that loan gives a $92,568.27 down payment.
The monthly payment factor is r ÷ (1 − (1 + r)−n), where r is the annual interest rate divided by 1,200 and n is the term in months. At a 0% rate, the factor is 1 ÷ n. Calculations retain precision internally; displayed amounts are rounded.
What if rent cannot cover taxes, insurance and HOA?
If those fixed housing costs equal or exceed rent divided by your target, there is no payment budget for a positive mortgage. The calculator reports that no positive mortgage is supported. A 100% cash purchase is not a qualifying DSCR loan, and increasing the down payment alone cannot establish loan eligibility in that case.
Is 20% down enough for a DSCR loan?
It depends on both the program and the property. A lender may offer an 80% LTV limit, but a rent-based coverage constraint can require more than 20% down, as this example shows. Credit, property type, qualifying rent, loan size and other underwriting requirements can also limit financing. The maximum LTV input is your assumption, not a universal lender standard.
Coverage is not net cash flow
This residential approach uses qualifying gross rent over PITIA. It does not deduct vacancy, repairs, management, utilities or other operating costs from rent. A property that reaches the target can still produce inadequate cash flow. Confirm the rent treatment and coverage definition with your lender, especially for short-term rentals or commercial property. This tool assumes a fully amortizing fixed-rate loan with monthly payments; it does not model interest-only periods or adjustable rates.
Sources and next steps
Visio Lending’s DSCR loan overview explains its residential rent-to-housing-payment approach. Griffin Funding’s DSCR calculator guide discusses PITIA and its lending context. Program requirements are lender-specific; verify the applicable terms before committing to a purchase.
Continue with the required rent calculator, compare a DSCR loan versus conventional financing, or explore how property taxes affect DSCR.