Debt Yield Calculator | CRE Loan Underwriting Tool
Use our Debt Yield Calculator to measure property risk and lender underwriting potential. Calculate NOI / Loan Amount instantly with REIF Loans.
Debt Yield Calculator for Commercial Real Estate Investors
Debt yield is one of the most important metrics commercial lenders use to evaluate risk and determine loan eligibility.
The REIF Loans Debt Yield Calculator lets you instantly calculate your property’s yield based on Net Operating Income (NOI) and loan amount, giving you a clear view of how lenders assess your deal.
Whether you are applying for a new CRE loan, refinancing, or assessing risk, our calculator delivers the insights you need in seconds.
What Is a Debt Yield and Why It Matters
Debt yield measures how much income a property generates relative to its loan balance. Unlike DSCR, it is independent of interest rates or amortization, making it a true indicator of property-level risk.
Formula:
Debt Yield = (Net Operating Income / Loan Amount) × 100
Example:
If your property earns $500,000 in NOI and the loan amount is $6,000,000, the debt yield is:
(500,000 / 6,000,000) × 100 = 8.33%
Typical lender thresholds:
- 10%+ = Strong, low-risk loan
- 8%–10% = Acceptable for stabilized assets
- Below 8% = Higher risk, may require more equity or lower LTV
Debt Yield Calculator
Use this tool to calculate your property's Debt Yield based on NOI and Loan Amount.
How the Debt Yield Calculator Works
Our Debt Yield Calculator is designed for simplicity and accuracy. It uses only two inputs, NOI and loan amount, to produce your yield percentage.
Steps to Use the Calculator
- 1. Enter Net Operating Income (NOI): Your property’s annual income after expenses.
- 2. Enter Loan Amount: The total current or proposed loan balance.
- 3. View Results: The calculator instantly displays your debt yield ratio as a percentage.
Interpretation:
- A higher yield means lenders see your property as safer.
- A lower yield indicates tighter cash flow and potential risk.
Why Lenders Rely on Debt Yield in CRE Underwriting
Lenders use Debt Yield to assess a loan’s safety margin independent of market factors like interest rates or amortization terms.
Key reasons lenders prefer it:
- Objective measure of risk: Based on property income, not borrower profile.
- Helps set maximum loan amounts: Ensures adequate yield on capital.
- Used across loan types: Common in bridge, construction, and permanent CRE loans.
- Supports portfolio health: Prevents over-leveraging during market volatility.
A higher debt yield gives lenders confidence that income will comfortably support debt, even in challenging markets.
Typical Debt Yield Thresholds for Different Loan Types
Every lender sets its own minimum acceptable yield, but most follow general ranges depending on loan type:
| Loan Type | Typical Minimum Debt Yield | Risk Profile |
|---|---|---|
 Core Stabilized Property | 9%–10% | Low risk |
 Value-Add or Transitional | 8%–9% | Moderate risk |
 Bridge or Short-Term Loan | 7%–8% | Elevated risk |
 Construction Loan | 10%+ | Conservative requirement |
Improving Your Debt Yield Ratio
If your debt yield falls below a lender’s target, there are several ways to strengthen your position.
Ways to Improve Debt Yield:
- Increase property income by raising rents or occupancy.
- Reduce expenses to boost NOI margins.
- Lower your loan amount or LTV.
- Wait for market stabilization before refinancing.
- Reposition your property to attract stronger tenants.
Even modest NOI improvements can significantly increase your debt yield and improve loan approval odds.
Frequently Asked Questions About the Debt Yield Calculator
What is a good debt yield for commercial real estate loans?
Most lenders prefer a 10% or higher yield for conservative underwriting.
How is debt yield different from DSCR?
Debt yield uses NOI and loan amount only, while DSCR includes interest rate and loan payments.
Can I use projected NOI for new acquisitions?
Yes, lenders often accept pro forma NOI for stabilized projections.
Is debt yield used for multifamily and mixed-use loans?
Yes, it is widely used in CRE, multifamily, and bridge loan underwriting.
Does a higher debt yield always mean better loan terms?
Typically yes, it signals lower risk, which can lead to better rates and leverage.
Start Using the REIF Debt Yield Calculator Today
Quickly measure your property’s performance and risk using our Debt Yield Calculator.
It is a fast, effective way to prepare for commercial financing, compare deal structures, or negotiate stronger terms with lenders.