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Financial Resilience · Authority Guide

Household Debt Service Coverage Ratio

Borrowed from commercial lending, the household DSCR measures how much income remains after debt service. Resilient households maintain DSCR ≥ 1.7.

In this guide

  1. 1 · Executive summary
  2. 2 · Key takeaways
  3. 3 · Key strategies
  4. 4 · Pro-tips checklist
  5. 5 · FAQ
  6. 6 · Related guides & tools

Executive summary

Borrowed from commercial lending, the household DSCR measures how much income remains after debt service. Resilient households maintain DSCR ≥ 1.7.

  • DSCR < 1.3 = fragile
  • DSCR 1.3–1.7 = thin
  • DSCR ≥ 1.7 = resilient

Key takeaways

  • DSCR < 1.3 = fragile
  • DSCR 1.3–1.7 = thin
  • DSCR ≥ 1.7 = resilient
  • Refinance to extend amortization when DSCR drops

Key strategies

  1. Strategy 1

    DSCR < 1.3 = fragile

  2. Strategy 2

    DSCR 1.3–1.7 = thin

  3. Strategy 3

    DSCR ≥ 1.7 = resilient

  4. Strategy 4

    Refinance to extend amortization when DSCR drops

Pro-tips checklist

  • Stress-test DSCR at 70% income
  • Never let DSCR drop below 1.3 even temporarily

FAQ

Does mortgage count in DSCR?

Yes. PITI is the largest household debt service for most homeowners.