Commercial Serviceability Calculator - ICR & DSCR
Commercial lenders do not assess a property loan on your personal income. They test whether the asset covers its own debt, using the Interest Cover Ratio and the Debt Service Cover Ratio. This calculator produces both and shows the maximum loan each supports.
Your details
Income
Rates, insurance, management, maintenance not recovered from the tenant
Debt
Commercial lenders typically assess 1.5-2.5% above the actual rate
Targets
| Gross annual rent | $320,000 |
| Less vacancy (5%) | $16,000 |
| Less non-recoverable outgoings | $45,000 |
| Net operating income (NOI) | $259,000 |
| Interest at actual rate | $123,250 |
| Interest at assessment rate what the ICR is tested on | $157,250 |
| Annual debt service (P&I, assessed) what the DSCR is tested on | $186,837 |
| Max loan on the ICR test | $1,866,667 |
| Max loan on the DSCR test | $1,885,281 |
| Surplus / (shortfall) vs requested loan | $166,667 |
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Frequently asked questions
What is the difference between ICR and DSCR?
ICR measures income against interest only. DSCR measures income against the full principal and interest commitment, so it is the stricter test on an amortising loan and is usually the binding constraint.
Why assess above the actual rate?
Commercial lenders add a buffer, typically 1.5 to 2.5 percentage points, so the asset still covers its debt if rates rise during the loan term.
General advice warning: This calculator provides general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice.
Results are estimates based on the inputs and assumptions shown. Any interest rate used is an example and is not an offer of credit. Speak to a licensed credit representative before acting on these figures.