Debt Yield Calculator

Find the debt yield of a property loan.

How to use

  1. Enter your values in the fields above.
  2. Press Calculate to see your result instantly.
  3. Use the Share button to copy a link to your result.

About this calculator

Debt yield is calculated as NOI ÷ Loan Amount × 100, expressing a commercial property's net operating income as a percentage of the loan balance rather than as a percentage of the purchase price or property value. Unlike loan-to-value or debt service coverage ratio, debt yield ignores interest rate, amortization period and capitalization rate entirely, which makes it a metric lenders cannot be misled by through creative loan structuring.

Commercial mortgage lenders, especially in CMBS (commercial mortgage-backed securities) underwriting, set minimum debt yield thresholds — commonly around 10% — as a floor test independent of other ratios, since it directly answers how quickly a lender could recover the loan balance from property income alone if it had to foreclose. Real estate investors and mortgage brokers calculate it early in a deal to gauge how much leverage a lender is likely to approve.

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