DSCR calculator

How your DSCR and maximum loan are worked out

The calculator takes your net operating income (rental or trading income after operating costs but before any finance) and divides it by the annual debt service (the total loan repayments due over a year). That single figure is your debt-service coverage ratio. A DSCR of 1.25 means income is 125% of the payments, leaving a 25% cushion; a ratio of 1.0 means income exactly covers the payments with nothing spare; below 1.0 the income does not cover the loan at all. The maximum loan output turns this maths on its head: it holds the DSCR at a 1.25 target, works out the annual debt service your income can support at that ratio, then back-solves the loan size that produces exactly that payment at your rate and term. That is the borrowing ceiling your income justifies, and it is the number most commercial lenders actually size the facility from. Every figure here is indicative and for planning; the lender confirms the real position once they underwrite.

Serviceability is the real ceiling, not just the asset

Two tests govern a commercial mortgage: how much the property is worth and how much your income can service. This tool is about the second, and it is very often the binding constraint. You can hold a strong asset and still be capped well below what the value alone would allow, because the income will not stretch to cover the payments at the lender's DSCR floor. The key structural levers you control here are term and repayment type. Extending the term, say from 15 to 25 or 30 years, lowers the annual debt service and lifts your DSCR, which can unlock a materially larger loan. An interest-only structure has a lower debt service than capital-and-interest, so it flatters the DSCR, but many lenders stress the ratio against a notional capital-and-interest basis or apply a lower floor to interest-only deals, so the headline improvement is often partly clawed back. The honest move is to model realistic terms rather than the most generous, because a ratio that only clears the floor on paper tends to fail at underwriting when the lender applies its own stress rate.

What actually drives the DSCR decision

The ratio itself is arithmetic, but several things decide which side of the lender's floor you land on, and by how much. The income you can evidence. Lenders take net operating income they can verify from accounts, tax returns or an AST-backed rent schedule, not projections. Vacancy allowances, management costs and repairs are stripped out first, so the number they use is usually lower than a landlord's gross figure. The stress rate. Most commercial lenders do not test DSCR at your actual pay rate; they test it at a stressed rate, often the pay rate plus 1% to 2% or a fixed floor, so a deal that shows 1.25 at 7% may need to clear the floor at 8.5% or 9%. The DSCR floor itself. Investment property and owner-occupied trading premises are commonly held to 1.25, though stronger covenants, longer leases or lower gearing can see 1.20 accepted, while riskier income (short leases, single-tenant, leisure or specialist use) is pushed to 1.30 or higher. Income durability. A long unexpired lease to a strong tenant, or steady trading profits, supports a keener view than lumpy or concentrated income. Enter conservative numbers here and the ratio you see will be closer to the one a lender reaches.

How much your income will actually support

In practice a UK commercial mortgage is sized by whichever is lower of the value-based cap and the DSCR ceiling, and the max loan figure above is your DSCR side of that calculation at a 1.25 target. If your net operating income only services a smaller loan at the stressed DSCR, that income limit is what you will actually be offered, however strong the security. To move a case quickly, have ready your last two to three years of accounts, a current rent schedule or lease copies for let property, recent business bank statements, and details of the property and any existing borrowing against it. Lenders are answering two questions: is the property sound security, and does the income comfortably service the debt through a stress. Because we place these deals rather than lend, we match your income profile and property to lenders whose DSCR floor, stress rate and sector appetite actually fit, instead of firing one application at a single desk. Any figure discussed before a formal offer is indicative; the rate, term and approval are the lender's decision.

How we help you get a sharper rate

A commercial mortgage is priced on the deal you present, and our job as your broker is to structure the serviceability case so it clears the floor with room to spare, then take it to the lenders most likely to price it keenly.

We take it to the right lender first. DSCR floors, stress rates and sector appetite vary widely across banks, challenger lenders and specialist commercial books; a deal that fails one desk's 1.30 stressed floor sails through another's 1.20. We hold that criteria detail across our panel, so we focus your case on the lenders whose serviceability test your income actually meets, rather than leaving credit footprints applying one by one.

We structure the deal to price well. We will model the term, repayment basis and any deposit against your net operating income so the DSCR lands comfortably above the floor, present the income in the verified, stripped-back form an underwriter uses, and evidence lease strength or trading durability that supports a keener view. Clearing the floor with headroom, not just scraping it, is what wins the sharper rate.

We tell you straight what is realistic. We cannot promise a rate or an approval, because those sit with the lender, but we can give you an honest read on the loan your income will actually support once stressed, and save you chasing a number that will not survive underwriting. It costs nothing to have us model it, and there is no obligation. Send us your income and the property and we will come back with indicative terms from lenders whose criteria fit.