DSCR = net operating income ÷ annual debt service. Lenders often require 1.20–1.25+. The loan is sized so the property’s income comfortably covers the payment, then capped by LTV.
How the loan is sized
Lenders take the property’s net operating income (NOI) and divide by the required DSCR to find the maximum supportable payment — then back into a loan amount, capped by LTV (often 65–75%).
Example
NOI of $120,000 with a required DSCR of 1.25 supports $96,000/yr in debt service. The loan amount that fits that payment (given rate and amortization), up to the LTV cap, is your likely maximum. We’ll model it precisely.
| Input | Effect |
|---|---|
| Higher NOI | Larger loan |
| Lower required DSCR | Larger loan |
| Lower rate | Larger loan |
| Higher LTV cap | Larger loan (to a point) |
Frequently asked questions
What is NOI?
Net operating income — property income minus operating expenses (before debt service). It drives commercial loan sizing.
Can you size my deal?
Yes — send the NOI, price, and property type; we’ll estimate the loan, DSCR, and payment.
What LTV is typical?
Often 65–75% for commercial, depending on property type and strength.
Save Financial is a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766). Figures are illustrative for 2026 and not an offer of credit.