How it works
The calculator totals the monthly housing expense for the loan you describe — principal and interest at the rate and term you enter, plus monthly taxes, insurance and HOA. At a ratio of 1.00, the break-even rent equals that total exactly. For any other target, it multiplies the total by the target ratio. If you also enter the rent you expect, it reports the cushion or shortfall in dollars per month.
Worked example
A duplex you are considering would carry a principal and interest payment of $1,900 a month at the terms you were quoted. Taxes are $4,200 a year ($350 a month), insurance $2,400 a year ($200 a month), and there is a $50 monthly association fee.
| Target ratio | Rent required |
|---|---|
| 1.00 (break-even) | $2,500 × 1.00 = $2,500 |
| 1.10 | $2,500 × 1.10 = $2,750 |
| 1.25 | $2,500 × 1.25 = $3,125 |
If the two units together rent for $2,900, you clear break-even by $400 a month but fall $225 short of a 1.25 target. That tells you exactly how much room you have to work with: a slightly smaller loan, a lower price, or a rent increase at lease renewal would each close the gap.
Using it to screen deals
Break-even rent is the fastest filter for listings. Before you request a rent schedule or tour a property, plug in the asking price-driven loan amount, the posted taxes and an insurance estimate. If market rents in the area sit well below the break-even figure, the deal will not qualify on coverage without a significantly larger down payment. Use the Max Loan by DSCR calculator to see what loan amount the market rent would actually support.