Debt Yield Calculator
Find the debt yield of a property loan.
Result
How to use
- Enter your values in the fields above.
- Press Calculate to see your result instantly.
- 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 hard to flatter 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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