Debt Yield Calculator
Measure lender risk — how quickly the loan is recouped from the property’s net operating income
What is Debt Yield?
Debt yield is a lender-focused metric that measures how quickly a lender could recoup their loan from the property’s net operating income alone, regardless of interest rates, amortization, or cap rates. It’s the purest measure of property-level risk.
Why Lenders Care About Debt Yield
Unlike LTV (which depends on appraisals) or DSCR (which depends on interest rates), debt yield is a fixed measure of risk. CMBS lenders, life insurance companies, and banks increasingly use debt yield as their primary underwriting constraint — typically requiring 8-12% for commercial loans.
Typical Debt Yield Requirements
• CMBS / conduit loans: 9–12% minimum
• Life insurance companies: 8–10% minimum
• Banks (portfolio): 8–10% minimum
• Agency (Fannie/Freddie multifamily): 8–10%
• Bridge / hard money: varies, but often 10%+
Debt Yield Formula
Debt Yield = (Net Operating Income ÷ Loan Amount) × 100
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Debt Yield in Commercial Refinancing
Debt yield is a secondary underwriting metric many commercial lenders use alongside DSCR and LTV. It measures NOI as a percentage of the loan amount, giving lenders a sense of how quickly they could recover their capital through foreclosure. Most banks want to see debt yield above 8–9% minimum. In the current environment, where rates have risen 150–300 bps since many loans were originated, debt yield provides a reality check on overleveraged properties. For the full refinance picture — DSCR, LTV, and debt yield in context — see our complete commercial mortgage refinancing guide.