Debt Yield
Debt yield = NOI / loan, the lender return that ignores rate and amortization and often caps the loan in tight credit.
Example
You enter
- Solve for yield
- Net operating income ($/yr) 120000
- Loan amount ($) 1500000
You get
- Debt yield (%) 8
Checked against published worked examples from: Wall Street Prep.
Details, formula, and sources
ScopeDebt yield = NOI / loan, the lender return that ignores rate and amortization and often caps the loan in tight credit; or the max loan a target debt yield supports. NOI $120K on a $1.5M loan = 8.0%; a 10% floor caps the loan at $1.2M. The lender governs the floor.
Formula or tableDY = NOI / loan x 100 (%); max_loan = NOI / (DY_min/100).
Source and editionThe commercial-real-estate debt-yield definition used by CRE lenders, by name.
Free accessDebt yield is a standard CRE underwriting ratio defined in lender guidance and CRE finance references. The lender governs the required minimum.
What governsEstimate. AHJ and licensed professional govern.
API field namesmode, noi, loan, debt_yield_pct
- Definition DY = NOI / loan; max_loan = NOI / DY_minCRE lender underwriting
- Leverage-independent ignores rate, amortization, and cap rateCRE finance
- Screen only a loan-sizing screen, not the DSCR/LTV constraints or a full underwritescope of this tile