Debt yield is a lender's-eye metric: annual net operating income divided by the total loan balance, shown as a percentage. A $60,000 NOI against a $1,000,000 loan is a 6% debt yield. It answers a blunt question, which is that if the lender had to foreclose today, what cash return would the property throw off on the money it lent?
What makes debt yield distinctive is what it leaves out. Unlike the debt service coverage ratio, it ignores the interest rate and the amortization period, so it cannot be flattered by stretching the term or assuming a low rate. That makes it a cleaner, more conservative gauge of leverage risk, and lenders often set a minimum debt yield as a floor beneath their loan sizing regardless of how cheap money is at the moment.