What this calculator does
This tool answers three investor questions at once. First, the full monthly payment (PITI): principal and interest, property tax, insurance, and mortgage insurance if required. Second, whether a target monthly rent covers that payment, shown under both debt-coverage conventions investors encounter. Third, the after-repair value at which a cash-out refinance returns the cash you put in, which is the arithmetic gate of the BRRRR strategy. Everything recalculates as you type, and nothing you enter leaves your device.
How the monthly payment is calculated
Principal and interest use the standard amortization formula: M = P x [ r(1+r)^n ] / [ (1+r)^n - 1 ], where P is the loan amount, r is the annual interest rate divided by twelve, and n is the number of monthly payments. Property tax is the annual rate applied to the purchase price, divided by twelve. Insurance is the annual premium divided by twelve. Mortgage insurance, when included, is an annual percentage of the loan balance divided by twelve. Together these four figures are the monthly payment lenders call PITI. Example: a $240,000 loan at 7.5 percent for 30 years produces principal and interest of $1,678 per month; add $550 of monthly tax and $150 of insurance and the PITI is $2,378.
DSCR two ways: why the lender's number and yours disagree
Residential DSCR lenders typically divide gross rent by the full payment (PITIA). Investors underwriting for profit divide net operating income, meaning rent after vacancy and management, by the debt service. The same property scores differently under each convention, commonly by 0.2 to 0.3, because roughly twenty percent of gross rent disappears to vacancy and management before a dollar reaches the mortgage. Worked example at $2,600 rent and a $2,378 PITI: the lender convention reads 2,600 / 2,378 = 1.09 and approves the loan; the investor convention applies nine percent vacancy and twelve and a half percent management, giving net income of about $2,070 against the same payment, a ratio of 0.87 and negative cash flow of roughly $300 a month. A loan approval is not a profitable property. This calculator shows both numbers side by side on every change so the gap is never hidden.
The BRRRR cash-out ARV target
Buy, rehab, rent, refinance, repeat only recycles capital if the refinance loan is large enough to repay the original financing and return your cash. At a refinance loan-to-value limit of 75 to 80 percent, the required after-repair value equals total basis divided by the LTV limit. At 80 percent that is exactly 1.25 times basis. Worked example: buy at $300,000 with $60,000 down, so the loan is $240,000 and total basis is $300,000. The ARV must reach $375,000, because 80 percent of $375,000 is $300,000, which retires the $240,000 loan and hands back the $60,000. Add renovation dollars and the bar rises with the basis: a $150,000 purchase plus a $100,000 renovation is $250,000 of basis and needs a $312,500 appraisal to fully recycle. If projected basis exceeds 80 percent of a defensible ARV, the refinance cannot return your capital no matter how well the rest of the deal performs.
Who this tool is for
Rental and BRRRR investors screening deals in minutes, agents sanity-checking an investor client's numbers, and homebuyers who want the payment math without lead-capture forms. It is a fast first screen, not a replacement for full underwriting: there is no rehab draw schedule, no five-year projection, and no PDF report. For deep analysis, pair it with a full modeling tool; for the sixty-second go or no-go on payment, coverage, and refinance feasibility, this page is the shortest path.
How this differs from mainstream calculators
Bankrate, Zillow, and NerdWallet answer the homebuyer question: what will this house cost per month. They do not test rent coverage under both DSCR conventions, and none compute a cash-out refinance target. BiggerPockets and dedicated BRRRR tools go deeper than this page on projections and reports, at the cost of accounts, paywalls, or lead-capture forms. This tool occupies the gap: investor math, zero friction.
| Capability | This tool | Bankrate / Zillow / NerdWallet | BiggerPockets / BRRRR tools |
|---|---|---|---|
| PITI payment breakdown | Yes | Yes | Yes |
| DSCR shown both conventions | Yes | No | Lender convention only, typically |
| Cash-out ARV target | Yes | No | Yes, behind account or paywall |
| No account, no ads, no lead forms | Yes | No | No |
| Data leaves your device | Never | Yes | Yes |
| Rehab draws, projections, PDF reports | No | No | Yes |
Definitions
- PITI / PITIA
- Principal, interest, taxes, and insurance; the A adds association dues. The full monthly housing payment a lender underwrites.
- DSCR
- Debt service coverage ratio. Income divided by debt payment. Above 1.0 the income covers the payment; lenders price best above 1.2; conservative investors require 1.25 on net income.
- NOI
- Net operating income. Rent minus vacancy, management, taxes, and insurance, before debt service.
- ARV
- After-repair value. The appraised value once renovation is complete; the base for the refinance loan.
- LTV
- Loan-to-value. Loan amount as a percentage of property value. Cash-out refinances typically cap at 75 to 80 percent.
- BRRRR
- Buy, rehab, rent, refinance, repeat. A strategy that recycles the same capital across acquisitions, workable only when basis stays at or under the refinance LTV of ARV.
Common questions
What rent do I need to cover a mortgage payment?
At minimum, rent must exceed the full monthly payment including principal, interest, taxes, insurance, and any mortgage insurance. In practice you need more, because vacancy and property management typically consume about twenty percent of gross rent before any repairs. A common investor standard is a debt service coverage ratio of 1.25, meaning net operating income is at least 1.25 times the debt service.
What is a good DSCR for a rental property?
Most DSCR lenders approve at 1.0 to 1.2 measured as gross rent over PITIA, with the best pricing above 1.2. Conservative investors hold a floor of 1.25 measured as net operating income over debt service, which is a materially stricter test because it charges vacancy and management against income first. A property can pass the lender test at 1.3 and fail the investor test at 0.9 on the same rent.
Why do lender DSCR and investor DSCR give different numbers?
They put expenses in different places. The residential lender convention divides gross rent by the full payment and counts vacancy and management nowhere. The investor convention subtracts vacancy, management, taxes, and insurance from income first, then divides by principal and interest. On a typical single-family rental the lender figure reads about 0.2 to 0.3 higher than the investor figure for the same property.
What after-repair value do I need to get my down payment back?
Divide your total basis, meaning purchase price plus renovation spending, by the refinance loan-to-value limit. At an eighty percent limit, a sixty thousand dollar down payment on a three hundred thousand dollar purchase requires an after-repair value of three hundred seventy-five thousand dollars for the refinance to retire the loan and return the sixty thousand.
How does the BRRRR method refinance work?
After renovation and leasing, you replace the acquisition financing with a long-term loan, usually a DSCR or conventional product sized at 75 to 80 percent of the after-repair appraisal. If that new loan exceeds your total project cost, the difference comes back to you at closing as recycled capital for the next purchase. If basis exceeds the refinance ceiling, capital stays trapped in the deal.
When is private mortgage insurance required?
Conventional lenders generally require mortgage insurance when the loan exceeds eighty percent of the property value, meaning a down payment under twenty percent. It usually falls off automatically once the balance reaches seventy-eight percent of the original value, and can often be cancelled by request at eighty percent.
Does a larger down payment always reduce the monthly payment?
Yes for principal and interest, because you borrow less, and it can also remove mortgage insurance once you pass twenty percent. It does not change property tax or hazard insurance, which follow the property value rather than the loan. The trade-off is that capital parked in the property is unavailable for the next acquisition.
Is this calculator accurate enough to make decisions with?
The amortization math is exact. The output is only as good as your inputs, and it excludes homeowners association dues, flood insurance, closing costs, and maintenance reserves. Treat it as a fast screen rather than a substitute for a lender's loan estimate or a full underwriting model.