What is a good Debt Yield ratio?

Most commercial lenders (CMBS and life insurance companies) require a minimum Debt Yield of 8.5% to 10.0%. A Debt Yield of 10%+ generally qualifies for maximum leverage and the most competitive loan pricing.

Updated: August 2026 • Verified v1.2

Commercial Real Estate (CRE) Debt Yield Ratio Underwriting Calculator

Finance & MathPopular

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Debt_Yield = (NOI / LoanAmount) * 100%; Max_Loan = NOI / (Required_Yield / 100)

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Understanding Your Results

Calculates property Debt Yield (NOI / Loan Amount), approval status against target lender minimums (8.5% - 10.0%), maximum allowable debt balance, and required equity injection to cure yield deficits.

Practical Guidance & Next Steps

Unlike DSCR, Debt Yield is completely unaffected by low interest rates or interest-only periods. It represents the lender's unleveraged cash-on-cash return if they took ownership through foreclosure.

What is this?

A commercial property financing utility that calculates Debt Yield ratios and maximum debt capacity for lenders and syndicators.

How does it work?

1. Enter annual Net Operating Income (NOI) and requested loan amount. 2. Enter the lender's required minimum Debt Yield (typically 8.5% to 10.0%). 3. View current Debt Yield, approval status, and maximum allowable borrowing capacity.

Why use it?

Determines loan sizing constraints before submitting financing packages to CMBS and institutional lenders.

Technical Scope & Calculation Limitations

Models standard commercial real estate debt yield underwriting standards.

Frequently Asked Questions

Debt Yield is a property's annual Net Operating Income (NOI) divided by the total loan amount, expressed as a percentage. It measures the lender's unleveraged return on investment if they foreclosed on the property on day one.

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