Real Estate Glossary

What is Debt?

The debt coverage ratio (DCR) is a measure of a borrower's ability to repay a loan. The DCR is calculated by dividing the net operating income (NOI) of a property by the debt service (the total amount of principal and interest payments due on a loan). The higher the DCR, the more financially secure the borrower is considered to be, and the more likely they are to be approved for a loan.