Our friends at TEG Federal Credit Union have made this Debt Service Coverage Ratio (DSCR) calculator available to all of our members. It is a metric commonly used in commercial lending (instead of personal credit scoring) to establish whether the borrower’s investment makes sense from an economic point of view. In contrast to private purchases, commercial mortgages are taken with one main objective in mind: to generate income. For example, you, as a real estate agent, might consider buying a building in order to rent out the apartments. The rent paid by the tenants will have to cover the loan you’ve taken (with interest) and provide you with some profit. Your lender won’t be interested in your credit history: he will be interested in predicted cash flows to ensure that you won’t run out of money to pay him off.
Only fill-in the highlighted cells. (Note: Formulas are contained in the non-highlighted cells and will automatically calculate the information inputted.)