What is DSCR (Debt Service Coverage Ratio) in Canadian mortgages?
Used for rental/investment properties. Measures whether rental income covers the mortgage payment. A DSCR ≥ 1.0 means the property is cash-flow positive.
How is DSCR calculated?
DSCR = Net Rental Income ÷ Annual Mortgage Payment (P&I)
What is the DSCR limit for Canadian mortgages?
DSCR ≥ 1.0 preferred; some lenders require ≥ 1.1 or ≥ 1.2
DSCR example
Worked example
Rental income $3,600/month ($43,200/yr), mortgage payment $3,000/month ($36,000/yr): DSCR = 43,200 / 36,000 = 1.2.