What is debt service coverage ratio?
DSCR measures how many times NOI covers the annual mortgage payments (interest plus principal).
Formula
DSCR = NOI ÷ annual debt service
Example
NOI €18,000 ÷ debt service €12,000 = 1.5×.
Why it matters
Lenders typically require 1.2–1.3×; Terrivio also shows a stressed DSCR with rates 2 points higher to test refinancing risk.
Frequently asked questions
What DSCR is safe?
Above 1.25× is generally comfortable; below 1.0× the property cannot pay its own loan.
Why show a stressed DSCR?
Because most European mortgages reset; a 2-point rate rise can push a 1.3× deal below 1.0×.