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Calculator · For Commercial & Investors

Debt yield

Check the debt yield on a commercial loan, a leverage test lenders run alongside DSCR and LTV. Then talk to us about sizing.

Your numbers

Net operating income divided by the loan, shown as a percentage.

Optional. Enter a target to see the loan it implies.
Debt yield
0%
Net operating income$0
Loan amount$0
Debt yield0%
Max loan at target debt yield$0
Max loan at a 9% floor$0
Max loan at a 10% floor$0
Talk to us

For illustration only and not an offer of financing or a rate quote. Lenders use debt yield as a leverage check alongside DSCR and LTV, and target debt yields vary by asset class and lender. Speak with us for figures specific to you. TMG HarbourTown Mortgage Inc., Licence #3000145.

What these numbers mean

Plain-language definitions and the typical ranges, so you can play with the inputs with confidence.

Net operating income (NOI)
Rental and other income from the property less operating expenses, before any mortgage payment. It is the cash available to service debt, and it sits on top of every leverage test a commercial lender runs.
Typical: lenders underwrite on reviewed NOI, often with vacancy, management, and reserves added in even if you self-manage.
Loan amount
The principal borrowed against the property. Debt yield measures the loan against the income, regardless of the interest rate or amortization, which is what makes it a clean leverage check.
Typical: the larger the loan for a given NOI, the lower the debt yield, and the more leverage the lender is taking on.
Debt yield (NOI / loan)
NOI divided by the loan, as a percent. Unlike DSCR, it ignores rate and amortization, so it is not flattered by a low rate or a long amortization. Lenders use it to cap leverage even when DSCR looks fine.
Typical: lenders often want a debt yield floor around 8 to 10 percent, asset class and conditions dependent.
Target debt yield
Optional. Enter the debt yield a lender requires and the tool shows the largest loan that clears it. The floor rows show what 9 and 10 percent targets would imply for the same NOI.
Typical: a higher required debt yield means a smaller loan; riskier asset classes carry higher floors.
How it sits with DSCR and LTV
Debt yield, DSCR, and loan-to-value are three separate tests, and the lowest loan any of them allows usually sets the deal. Debt yield can bind even when DSCR and LTV look comfortable, especially in low-rate or long-amortization scenarios.
Typical: rate-insensitive by design, so it protects the lender if rates rise at renewal.
These are general ranges, not your numbers. The right figure depends on your situation, the property, and the lender. Talk to us and we will pin it down.

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