Debt Yield Calculator
Compare annual net operating income with a property loan balance
Debt yield
How we calculated it
About the Debt Yield Calculator
Debt yield compares a property’s net operating income with the loan amount secured against it. It is a lender-focused real-estate credit metric because it measures property income relative to debt without depending on interest rate, amortization or property valuation.
Unlike DSCR, debt yield does not change simply because the loan interest rate changes. Unlike LTV, it does not rely directly on an appraisal value.
How to Use the Debt Yield Calculator
- Enter annual net operating income.
- Enter the loan amount.
- Calculate debt yield.
- Use the lender’s NOI definition and compare the result with LTV and DSCR for a fuller credit picture.
How the Calculation Works
Debt yield = annual NOI ÷ loan amount ×100.
The numerator is typically property-level net operating income before financing, while the denominator is the relevant loan principal. Because interest rate is absent from the formula, debt yield focuses on income support for the amount lent.
Worked example
Debt Yield Calculator Worked Example
$500,000 NOI and $5 million loan
Debt yield = $500,000÷$5,000,000×100 = 10%.
Result guide
Understanding Your Debt Yield Calculator Result
A 10% debt yield means annual NOI equals 10% of the loan amount. Higher debt yield generally means more income support relative to debt, all else equal. Debt yield is often useful in downside analysis because it does not depend on the property appraisal. If NOI falls, the ratio declines immediately even if the stated property value has not been updated, giving lenders another perspective on income support for the loan.
Before you rely on the answer
Assumptions and Limitations
- NOI follows the lender’s stated calculation.
- Loan amount is the relevant secured principal.
- Property and income figures use the same annual basis.
Practical tip
Using This Result in Practice
Do not substitute gross rent for NOI. Debt yield is only as useful as the income figure, and ignoring operating expenses can make the loan look much safer than it is.
Related calculations
Useful Calculations to Continue With
If you want to measure income relative to scheduled principal and interest payments, use the Debt Service Coverage Ratio Calculator.
If you want to measure the loan relative to collateral value, use the Loan-to-Value Calculator.
Common questions
Debt Yield Calculator FAQ
What is debt yield?
Annual net operating income divided by loan amount.
How is debt yield different from DSCR?
Debt yield ignores interest rate and amortization, while DSCR compares income with scheduled debt service.
Does debt yield use property value?
No. That is one reason lenders may use it alongside LTV.