What a 1.30 DSCR Means for a Rental Loan

A 1.30 DSCR means the property brings in $1.30 of rent for every $1.00 of mortgage payment, taxes, insurance and HOA. Rent is 30% higher than the full payment. That cushion is what lenders price for, so a 1.30 ratio lands in the best rate tier at nearly every DSCR lender and supports the highest loan-to-value they offer, usually 75 to 80%.

A 1.30 DSCR in real numbers

Take a $500,000 rental with 25% down, a $375,000 loan at 7.5% over 30 years, annual taxes of $5,500 and insurance of $2,500.

Principal and interest: $2,622
Taxes and insurance: $667
Total PITIA: $3,289
Rent for a 1.30 DSCR: $4,275
Monthly cash flow before expenses: $986

Rent needed for a 1.30 DSCR at other price points

Same assumptions, different purchase prices. Taxes are set at 1.1% of price and insurance at 0.5%, so adjust for your market.

Price	Loan (75% LTV)	PITIA	Rent for 1.30
$150k	$112,500	$987	$1,285
$200k	$150,000	$1,315	$1,710
$250k	$187,500	$1,644	$2,140
$300k	$225,000	$1,973	$2,565
$350k	$262,500	$2,302	$2,995
$400k	$300,000	$2,631	$3,420
$450k	$337,500	$2,960	$3,850
$500k	$375,000	$3,289	$4,275
$550k	$412,500	$3,618	$4,705
$600k	$450,000	$3,946	$5,130
$650k	$487,500	$4,275	$5,560
$700k	$525,000	$4,604	$5,985
$750k	$562,500	$4,933	$6,415
$800k	$600,000	$5,262	$6,840
$900k	$675,000	$5,920	$7,695
$1m	$750,000	$6,577	$8,550

Check your own property at 1.30

The calculator below is set to the example above with the lender minimum at 1.30. Replace the numbers with yours.

Build the payment from price, rate, taxes and insurance

Your DSCR

1.30

Marginal

Covers the payment, but under your target. Expect a rate bump or a bigger down payment.

$4,275 rent / $3,289 PITIA

Monthly payment (PITIA)

Principal and interest: $2,622.05
Property taxes: $458.33
Insurance: $208.33
Total PITIA: $3,288.72
Monthly cash flow: $986.28

Loan amount $375,000 at 75% LTV. Cash flow here is before vacancy, repairs and management.

What it takes to qualify

Rent needed for 1.00: $3,289
Rent needed for 1.30: $4,275
Rent shortfall to target: $0
Max loan at 1.30 on this rent: $374,963
That is an LTV of: 75.0%
Minimum down payment: $125,037

To reach 1.30, either raise rent by $0 a month or put down $37 more.

1.30 DSCR questions

Is a 1.30 DSCR good?

Yes. Anything at or above 1.25 is considered strong by DSCR lenders. A 1.30 ratio qualifies for the best rate tier and the highest LTV at almost every program.

What rent do I need for a 1.30 DSCR?

Multiply the full monthly payment (principal, interest, taxes, insurance and HOA) by 1.30. On a $500,000 property with 25% down at 7.5%, the payment is $3,289 and a 1.30 ratio needs $4,275 in rent.

Can I get a DSCR loan with a 1.30 ratio?

Yes. A 1.30 ratio meets the 1.0 minimum at most DSCR lenders.