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Loan to Value Ratio
Breakeven Ratio
Two-Input Ratio Debt Metrics Loan & Mortgage Risk Assessment

Debt Yield

NOI as a percentage of total loan amount.

Example Result

Sample Data
6.75%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Debt Yield Formula

Net Operating Income / Loan Amount x 100
$20,566 / $308,000 x 100
6.75%

What This Means

A sample property priced at $385,000 with $2,850/month rent has a debt yield of 6.75% at Purchase (Month 0). Debt yield is increasingly used by commercial lenders as a risk metric that is independent of interest rates. A minimum 8-10% debt yield is common for commercial loans. It represents the lender's worst-case return on their capital.

Where This Value Comes From

Debt Yield is not entered directly — it is calculated from Net Operating Income and Loan Amount. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Debt Yield

Platform Distribution

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Why It Matters

Debt yield is increasingly used by commercial lenders as a risk metric that is independent of interest rates. A minimum 8-10% debt yield is common for commercial loans. It represents the lender's worst-case return on their capital.

Detailed Explanation

Debt Yield measures NOI relative to the total loan balance. Unlike DSCR which depends on loan terms, debt yield shows the lender's return if they had to take over the property, regardless of interest rate or amortization.

Example

Sample Result
7.62%

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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