Commercial DSCR + cap-rate calculator.
Commercial lenders qualify primarily on Debt Service Coverage Ratio (DSCR). Most want ≥ 1.20-1.30. Below 1.10 = decline; above 1.40 = best pricing.
Commercial lenders qualify on the property's numbers, not just yours — chiefly the Debt Service Coverage Ratio (net operating income ÷ annual mortgage payments). Most want a DSCR of 1.20–1.30+; below ~1.10 is usually a decline, above 1.40 earns the best pricing. Enter the income, price, and loan terms to see your DSCR, cap rate, and payment.
Your inputs
Where your DSCR lands
At 1.31, this deal is strong — best pricing territory. Lenders read DSCR as a cushion: every $1.00 of mortgage payment is covered by $1 of NOI.
Where your money goes
Total interest vs. principal over the full 25-year amortization at 5.95%
Lender-ready summary, your assumptions baked in, and a personalized note from an advisor at Mortgage Squad Advisors.
How commercial mortgages are underwritten
Commercial lending flips the residential logic on its head: the property qualifies, not you. The gate is Debt Service Coverage Ratio — net operating income divided by the annual mortgage payment. Most lenders want DSCR ≥ 1.20-1.25 on stabilized income property; below 1.10 is usually a decline, and above 1.40 earns the sharpest pricing. Your personal income and net worth still matter as a backstop (the "sponsor strength"), but the cashflow drives the deal.
Leverage and amortization
Conventional commercial tops out at 65-75% loan-to-value — so budget for 25-35% down — over a 20-25 year amortization. Asset class sets the band: well-tenanted multifamily and owner-occupied get the higher leverage and longer amortization; single-tenant, specialty, and hospitality assets get less and price wider. The principal-vs-interest donut above shows how front-loaded the interest is over a 25-year term.
The big exception is CMHC MLI Select for 5+ unit residential: stacking energy, affordability, and accessibility points can unlock far higher leverage, up to 50-year amortization, and rates 100-150 bps below uninsured commercial — which also lifts DSCR by shrinking the payment. Running a multifamily file? Compare it against our rental cashflow calculator to see the NOI build-up.
Amortization schedule
How your balance falls — and how the interest/principal split shifts — over 25 years.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | $30,455 | $97,931 | $1,649,545 |
| 2 | $32,294 | $96,092 | $1,617,251 |
| 3 | $34,244 | $94,142 | $1,583,006 |
| 4 | $36,312 | $92,074 | $1,546,694 |
| 5 | $38,505 | $89,882 | $1,508,189 |
| 6 | $40,830 | $87,556 | $1,467,359 |
| 7 | $43,296 | $85,091 | $1,424,063 |
| 8 | $45,910 | $82,476 | $1,378,153 |
| 9 | $48,682 | $79,704 | $1,329,471 |
| 10 | $51,622 | $76,765 | $1,277,849 |
What is DSCR and how is it calculated?
Net Operating Income ÷ Annual Mortgage Payment. NOI = gross rent − operating expenses (excluding the mortgage). DSCR of 1.25 means the property generates 25% more cashflow than the mortgage payment. Most commercial lenders want minimum 1.20-1.25.