Calculate debt yield
Annual NOI is divided by original loan amount.
Rental, Investment and Commercial Real Estate
Debt Yield Calculator Commercial Lending
Calculate debt yield, compare it with a selected target, estimate maximum loan amount at that target, identify required NOI, and review LTV separately.
Current debt yieldTarget yield testMaximum loan at targetRequired NOI
Calculation inputs
Test debt yield and loan sizing
Debt yield compares stabilized NOI directly with the original loan amount, without relying on interest rate or amortization.
How the calculation works
Understand the formula before relying on the result
Test the target
Current debt yield is compared with the selected target percentage.
Size maximum debt
NOI is divided by the target debt yield to estimate the maximum loan supported by that constraint.
Compare leverage
The entered loan is also divided by property value to show LTV as a separate limit.
Interpret the result
Debt yield is rate-independent
It does not change when interest rate or amortization changes.
It measures lender basis
The ratio shows property NOI relative to the requested debt amount.
It does not replace DSCR
A loan can satisfy debt yield but fail payment coverage at a high interest rate.
Normalized NOI remains critical
Aggressive income or understated expenses can overstate debt yield.
Common mistakes
- Using gross revenue instead of NOI.
- Dividing by property value instead of loan amount.
- Assuming a target is universal across lenders and assets.
- Ignoring DSCR and LTV.
- Applying borrower-projected NOI without normalization.
What lenders review
- Stabilized lender NOI.
- Requested original loan amount.
- Property value and LTV.
- DSCR at the proposed rate and amortization.
- Asset class, market, leases, sponsor, and exit risk.
Planning tips
- Calculate NOI first.
- Compare target-yield loan sizing with DSCR sizing.
- Use the most conservative normalized income case.
- Review LTV and loan-to-cost separately.
- Recalculate if the lender changes the recognized NOI.
Connected HopeWell knowledge
Connect the debt yield calculator to the mortgage decision
Use the result alongside HopeWell's guide chapters, glossary definitions, real underwriting case studies, service pages, and related calculators.
Calculation pathway
Related mortgage calculators
Continue into qualification, purchase costs, equity, refinancing, HELOC planning, and mortgage comparison using the connected calculators below.
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Model commercial mortgage payments, LTV, loan-to-cost, DSCR, debt yield, fees, cash required, and term maturity balance.
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Cap Rate Calculator
Calculate stabilized NOI, capitalization rate, target-cap valuation, gross rent multiplier, and operating expense ratio.
Frequently asked questions
Questions about this calculation
What is debt yield?
Debt yield is annual NOI divided by the original loan amount, expressed as a percentage.
Does interest rate affect debt yield?
No. Interest rate and amortization affect DSCR but not debt yield.
How do you calculate maximum loan from debt yield?
Divide annual NOI by the target debt yield expressed as a decimal.
Why can debt yield pass while DSCR fails?
A high rate or short amortization can create debt service that NOI cannot cover even when NOI is acceptable relative to loan amount.
Is debt yield the same as cap rate?
No. Cap rate divides NOI by property value; debt yield divides NOI by loan amount.