Debt Yield Calculator

Work out debt yield instantly with clear inputs, formula shown and shareable results.

About Debt Yield Calculator

Debt yield is net operating income divided by the loan amount, the return a lender would earn if it foreclosed and operated the asset. Unlike loan to value or debt service coverage it needs no valuation and no interest rate, which is why it became the lenders' preferred constraint after the credit crisis.

Formulas

Debt yield

Debt yield = NOI / loan amount x 100

Loan limit

Maximum loan = NOI / minimum debt yield

Worked example

With the default values below, Debt Yield Calculator returns Debt yield of 10.000%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net operating incomeminimum 0: 1,200,000
Loan amountminimum 0.01: 12,000,000
Lender minimum debt yieldaccepts 1–30 %: 10 %

Results

Debt yield: 10.000% %
Maximum loan at the minimum debt yield: $12,000,000.00
Loan per unit of NOI: 10.000
Assessment: Meets the lender's minimum debt yield

Step by step

1Values used
2Debt yield
3Loan limit
4Debt yield= 10.000 %
5Maximum loan at the minimum debt yield= 12,000,000.00
6Loan per unit of NOI= 10.000
7Assessment= Meets the lender's minimum debt yield

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is the Debt Yield figure worked out?

Debt yield = NOI / loan amount x 100. Debt yield is net operating income divided by the loan amount, the return a lender would earn if it foreclosed and operated the asset.

Why is debt yield more robust than LTV?

Loan to value depends on a valuation that itself depends on cap rates, so in a bubble both inflate together. Debt yield rests only on actual income.

What values do I need to enter?

This calculator takes 3 inputs: Net operating income, Loan amount, Lender minimum debt yield. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.