Debt Yield Calculator
Size a commercial loan the way lenders do. Enter net operating income, appraised value, loan terms and the lender's minimums to see the maximum loan under the LTV, DSCR and debt yield tests, and which one sets the amount.
Size Your Loan
Property
Loan Terms
Lender Minimums
Illustrative defaults. Use the figures on your term sheet; each capital provider sets its own.
Maximum loan (lowest of the three tests)
$6,750,328
DSCR sets the loan. At this amount: LTV 67.5%, DSCR 1.25x, debt yield 9.48%.
| Test | Required NOI ÷ loan | Maximum loan |
|---|---|---|
| LTV | 8.53% | $7,500,000 |
| DSCR (binds) | 9.48% | $6,750,328 |
| Debt yield | 9.00% | $7,111,111 |
Mortgage constant: 7.585%.
Estimates for planning only. Lenders size on their own underwritten NOI and appraised value.
What is debt yield?
Debt yield is net operating income divided by the loan amount. It measures how much income a property produces for each dollar lent. Because it leaves out the interest rate, the amortization schedule and the appraised value, it cannot be improved by a low rate, an interest-only period or a generous appraisal. For that reason CMBS lenders and many banks use it alongside LTV and DSCR.
Debt Yield = Net Operating Income ÷ Loan Amount
Maximum loan = Net Operating Income ÷ Minimum Debt Yield
The three sizing tests
Lenders usually run all three tests on the same deal and lend the lowest result. Each formula can be turned around to give a maximum loan.
| Test | Ratio | Maximum loan | What moves it |
|---|---|---|---|
| LTV | Loan ÷ appraised value | Value × maximum LTV | Appraisal, cap rate |
| DSCR | NOI ÷ annual debt service | NOI ÷ minimum DSCR ÷ mortgage constant | NOI, interest rate, amortization |
| Debt yield | NOI ÷ loan amount | NOI ÷ minimum debt yield | NOI only |
The mortgage constant is the annual payment per dollar borrowed. On a 30-year amortizing loan at 6.50% it is 7.585%. On an interest-only loan it equals the interest rate.
Worked example
A stabilized multifamily property appraises at $10,000,000 with $640,000 of underwritten NOI, a 6.40% cap rate. The lender's minimums are 75% LTV, 1.25x DSCR and a 9.0% debt yield, on a 6.50% rate with 30-year amortization. These are illustrative assumptions, not a quote. They are the calculator's default inputs, so you can reproduce the result above.
| Test | Arithmetic | Maximum loan |
|---|---|---|
| LTV | $10,000,000 × 75% | $7,500,000 |
| DSCR | $640,000 ÷ 1.25 = $512,000; $512,000 ÷ 7.585% | $6,750,328 |
| Debt yield | $640,000 ÷ 9.0% | $7,111,111 |
The DSCR test binds, so the loan is about $6.75 million: 67.5% LTV, 1.25x DSCR and a 9.48% debt yield. A sponsor who planned on 75% leverage would be about $750,000 short at closing.
The shortcut: compare three required yields
Each test can be written as a minimum ratio of NOI to loan. The highest ratio binds, and NOI divided by it gives the loan.
- •LTV test: cap rate ÷ maximum LTV = 6.40% ÷ 75% = 8.53%
- •DSCR test: minimum DSCR × mortgage constant = 1.25 × 7.585% = 9.48%
- •Debt yield test: the minimum itself = 9.00%
The calculator shows this column too. It also explains why rising rates shrink loans: the DSCR figure moves with the mortgage constant, while the other two do not. For the full walk-through, including how the binding test changes across interest rates, read Debt Yield vs. DSCR vs. LTV: Which One Sizes Your Loan.
Where the minimums come from
- •Bank LTV ceilings.The federal banking agencies' interagency guidelines set a supervisory LTV limit of 85% for improved property and 80% for commercial and multifamily construction. Banks usually lend below those limits.
- •Agency multifamily.Fannie Mae's multifamily term sheet lists a minimum 1.25x DSCR and maximum 80% LTV for conventional properties.
- •CMBS. CREFC Research reported deal-weighted average debt yields of 12.4% on 5-year and 16.2% on 10-year conduit deals for 2026 through October 9 (excluding multifamily-only conduits), measured on underwritten NOI. These are averages across deals, not minimums.
Bridge lenders and banks set their own debt yield and DSCR minimums by property type, market and sponsor. Treat any number on a term sheet as that capital provider's view of that deal. To check coverage on a rental or small property, use the DSCR calculator.
Sources, accessed October 2026: Real Estate Lending: Interagency Guidelines on Policies (Supervisory Loan-to-Value Limits) (Board of Governors of the Federal Reserve System); Multifamily Term Sheet (Fannie Mae); CMBS New Issue Snapshot Data through October 9, 2026 (CRE Finance Council (CREFC) Research).
Have a deal? Send it to our team for sizing
Lenders size on their own underwritten NOI, which often differs from a sponsor's figure. Send the rent roll, T-12 and your target loan, and we will review how it is likely to size across financing structures.
Debt yield calculator FAQ
What is debt yield?
Debt yield is a property's net operating income divided by the loan amount, expressed as a percentage. A $640,000 NOI on a $7,111,111 loan is a 9.0% debt yield. It tells a lender how much income the property produces for each dollar lent, without regard to the interest rate, amortization or appraised value.
How do you calculate the maximum loan from a debt yield requirement?
Divide underwritten NOI by the minimum debt yield. With $640,000 of NOI and a 9.0% minimum, the debt yield test supports up to $7,111,111. Lenders then compare that figure with the loan supported by their LTV and DSCR tests and use the lowest of the three. Many lenders use their own underwritten NOI, which can be lower than the sponsor's figure.
What is the difference between debt yield and DSCR?
Both compare NOI to the loan. 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 itself, so it does not. A loan can pass a DSCR test because the rate is low or the loan is interest-only and still fail a debt yield minimum.
Which test usually limits the loan?
Convert each test to a required ratio of NOI to loan: cap rate divided by maximum LTV, minimum DSCR times the mortgage constant, and the debt yield minimum. The highest of the three binds. When interest rates rise, the mortgage constant rises and the DSCR test binds more often. When properties trade at higher cap rates, the LTV test tends to bind.
What debt yield do lenders require?
There is no single standard. Each lender sets its own minimum by property type, market and sponsor, and it changes with the market. As one published data point, CREFC Research reported deal-weighted average debt yields of 12.4% on 5-year conduit CMBS and 16.2% on 10-year conduit CMBS for 2026 through October 9, measured on underwritten NOI. Use the minimum on your term sheet.
Calculator results and examples are estimates for planning and do not represent a quote or commitment. Rates and minimums shown are illustrative assumptions. Brookmont Capital Ventures, LLC provides capital markets advisory services and Brookmont Lending, LLC provides commercial and business-purpose lending. Brookmont's capacity varies by transaction and is disclosed in the transaction documents. All financing is subject to approval and underwriting.