How it works
Debt yield is net operating income (NOI) divided by the loan amount. A $450,000 NOI on a $4.5 million loan is a 10% debt yield: if the lender had to take the property back, the income would return 10% a year on the money it lent. Unlike DSCR, it ignores the interest rate and amortization, and unlike LTV, it ignores the cap rate an appraiser picks — which is why commercial and bridge lenders use it as a leverage cap. Enter your NOI, loan and value; the calculator also shows the largest loan your NOI supports at a lender’s minimum. Read the full debt yield guide for how lenders apply it to hotels, mobile home parks and multifamily bridge loans.
Frequently asked questions
What is a good debt yield?
There is no single standard: each lender sets its own minimum by asset type, market and how stable the income is, and riskier income such as hotel room revenue usually needs a higher debt yield than leased multifamily. Bridge lenders on transitional assets also size to as-is value and the business plan, so ask each lender for its minimum before you sign a contract.
How is debt yield different from DSCR?
DSCR divides NOI by the annual debt payment, so it changes with the interest rate and amortization. Debt yield divides NOI by the loan amount, so it stays the same whatever the rate — a pure measure of how much income backs each dollar lent.
How do I find the maximum loan from debt yield?
Divide the NOI by the minimum debt yield. With $450,000 NOI and a 9% minimum, the maximum loan is $450,000 ÷ 0.09 = $5,000,000. The final loan is the lowest of the debt-yield, LTV and DSCR results.
