DSCR Stress Test

A coverage ratio is a snapshot of assumptions you chose. Rent estimates come in high, rates move between application and lock, and taxes reassess after a sale. Stressing the inputs shows how much of the coverage was margin and how much was assumption.

Rent, because it is the entire numerator. A ten percent rent shortfall moves coverage further than a half-point rate change on most files, though a large loan amount narrows that gap.

The rent at which the modeled monthly margin reaches zero after operating costs and debt service. It is not a lender threshold. Lenders test the coverage ratio against their own minimum, which is usually well above break-even.

Underwriting practice varies. Some lenders qualify on a stressed rate or apply a vacancy factor to rent. This tool does not replicate any lender's model, and no result here is an approval or a prediction of one.

Both sit inside the payment a DSCR lender tests. A reassessment after purchase or an insurance increase raises the denominator without touching rent, which lowers coverage even when nothing about the tenancy changed.