Metrics

What Is Debt Service?

Debt service is the total of a year's principal and interest payments on every loan against a property.

Debt service is what you subtract from NOI to get cash flow, and it is the denominator of DSCR. It depends on the loan amount, interest rate, and amortization, or, on an interest-only loan, simply the loan times the rate. A longer amortization lowers annual debt service, which raises DSCR and lets a property support more debt.

Size it from your loan terms on the commercial mortgage calculator.

See it on a real deal

RVP Underwriter computes this from your documents automatically, with every figure shown and sourced. Underwrite a deal free.

Related terms

Underwriting a specific property?

Step by step, line by line: how to underwrite an RV park or campground, a mobile home park, or a self storage facility. Every one starts the same way: rebuild the seller's NOI.

Part of the RVP Underwriter glossary of income-property underwriting terms. Browse all definitions, or put them to work with the free calculators.