How it works
How this tool works.
Debt yield is a lender’s rate-proof measure of loan risk. By dividing net operating income by the loan amount, it asks a blunt question: if the lender had to take the property back, what return would the income represent on the money lent? Because it ignores interest rate and amortization, a low rate or long term can’t flatter it.
Enter the annual NOI and the loan amount, and this calculator estimates the debt yield. It’s arithmetic on your inputs; each lender sets its own floor.
Enter the annual net operating income — rent minus operating expenses, excluding the mortgage.
Enter the loan amount being considered.
The tool divides NOI by the loan to estimate the debt yield percentage.
Compare it against a lender’s minimum to gauge how much loan the income can support.
Make the result useful
Debt-yield underwriting context
NOI is the annual operating income supporting the loan.
Loan amount is the outstanding or proposed principal, not annual debt service.
Debt yield removes rate and amortization so property income can be compared with loan size.
Use the same stabilized income assumption across comparable loans.
The assumptions that move this result
NOI
Annual operating income before financing.
Loan amount
Proposed or outstanding principal.
Income basis
Stabilized annual income assumption.
Expense basis
Recurring costs supporting NOI.
debt yield = annual NOI ÷ loan amount
Use the output as a documented scenario result, not a guarantee.
Read the number in context
Worked scenario
Scenario: $42,000 NOI ÷ $350,000 loan = 12% debt yield.
Edge case
Edge case: a temporary rent spike can overstate stabilized NOI.
It does not determine lender approval, rate, or borrower creditworthiness.
Before you act
• Verify NOI support.
• Compare loan amount, not payment.
• Ask lender for its required definition.
Worked formula
debt yield = annual NOI ÷ loan amount
Is this a forecast?
No. It calculates the assumptions you enter.
Can it replace professional review?
No. Use current records and qualified advice.
What should I save?
Keep the assumptions and source records used for the decision.