LTV & DSCR calculator
Check your loan-to-value and debt service coverage ratio against typical lender covenants before you talk to the bank.
Free, no account. Runs in your browser; your numbers are never sent to a server.
LTV & DSCR
What it measures
This checks the two main bank covenants. LTV (loan-to-value) limits how much of the purchase price is funded by debt. DSCR (debt service coverage ratio) checks that the property generates enough cash to pay the mortgage.
When to use it
Run this before speaking to a lender. It is how lenders assess your deal.
Watch out for
Interest-only loans flatter your DSCR because payments are lower. Check that the deal still works with principal and interest (amortization).
LTV & DSCR
Check whether the deal meets typical lender limits.
Typical bank leverage.Safe below 60%, maximum 75%
Acceptable, but with a limited buffer.Bank minimum 1.25x, safe above 1.50x
NOI needed to meet lender targets
- Bank minimum (1.25x)
- €60,030
- Safe level (1.50x)
- €72,036
How it works
DSCR = NOI / Annual Debt Service · LTV = Loan / Property ValueLenders underwrite two constraints at once. Loan-to-value caps how much of the property's value they'll finance (typically 60-75% for commercial assets). The debt service coverage ratio checks whether the building's income actually carries the loan: annual net operating income divided by annual mortgage payments. Banks usually demand at least 1.20-1.25×, meaning income must exceed debt payments by 20-25%. Your real borrowing limit is whichever constraint binds first, and this calculator shows both and flags the binding one.
Worked example
Say a property produces €120,000 NOI and you want a €1.5M loan at 5% amortizing over 300 months. The annual debt service is about €105,200, so DSCR is 1.14×, below the 1.25× most banks require, even if the LTV looks fine. At that rate and term, the income actually supports roughly €1.37M of debt. The €130,000 gap is what you'd need to cover with extra equity or negotiate away with a longer amortization.
Common questions
What is DSCR?
The Debt Service Coverage Ratio divides net operating income by annual debt payments. A DSCR of 1.25 means the property earns 25% more than its loan costs, which is the buffer lenders rely on.
What DSCR do banks require?
Most commercial lenders want at least 1.20-1.25x, with 1.50x considered comfortable. Below 1.0 the property doesn't cover its own debt and needs cash injections from the owner.
What is LTV and how does it relate?
Loan-to-value is the loan amount divided by the property's value. Banks typically cap LTV at 60-75% for commercial property. Your maximum loan is whichever constraint binds first: the LTV cap or the DSCR requirement.
Last reviewed July 2026