How DSCR and ICR actually work, explained with real Sheffield examples
Every lender quote on a commercial investment mortgage tests one of two cover ratios, ICR (interest cover ratio) or DSCR (debt-service coverage ratio). Get the test wrong and the offer prices down at credit committee, or falls over completely. This piece walks through both ratios using real-shape Sheffield investment deals: a Heart of the City II S1 office let on FRI, an Ecclesall Road S11 shop-with-flats parade, a four-asset S10 / S11 portfolio across Broomhill and Nether Edge, and a Kelham Island S3 mixed-use block. We work the numbers at pay rate and at stressed rate, show where each lender sets the threshold, and explain how to engineer the structure (term length, LTV step-down, fixed vs tracker) so the case clears comfortably.
This piece is in preparation.
The outline below is the planned structure for the full piece. Send a topic suggestion or a follow-up question to enquiries@commercialmortgagessheffield.co.uk and we will work it in.
Coming soon, full guide to DSCR and ICR for Sheffield commercial investment mortgages.
Outline
- Definitions: ICR vs DSCR
- Standard thresholds and the stress test
- Worked example 1: Heart of the City II S1 single-let office, ICR
- Worked example 2: Ecclesall Road S11 semi-commercial parade, blended ICR
- Worked example 3: four-asset Broomhill / Nether Edge S10 / S11 portfolio, DSCR
- Worked example 4: Kelham Island S3 mixed-use block, DSCR with residential blend
- Engineering the cover: term length, LTV, structure
- Lender-by-lender threshold table at mid-2026
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