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Debt Yield

Debt yield measures loan risk by dividing a property's NOI by the loan amount, showing a lender's return if it had to take the property back and sell it. It's used as a floor test that isn't affected by interest rates the way DSCR is.

Example

A property with $650,000 in NOI and a $6,500,000 loan has a 10.0% debt yield.

Formula

NOI ÷ Debt Yield % = Max Loan Amount on Debt Yield

Excel Formula:

=B8/B11
  • B8 = NOI
  • B11 = Loan Amount
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