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Commercial Debt Yield Calculator

Debt yield is the lender's 'what would I make if I foreclosed tomorrow?' number. Because it's rate-independent, it's the most durable size constraint. This calculator compares current DY to both the minimum (closing threshold) and target (underwriting cushion) and returns the max loan at each level.

Stabilized NOI

Proposed loan amount

Lender minimum debt yield

Target debt yield (for underwriting)

Current debt yield

9.00%

Max loan at minimum DY

$8,000,000

Max loan at target DY

$7,200,000

Loan vs max DY (+ means over)

Meets minimum DY

Yes

How the math works

Commercial debt yield (NOI ÷ loan) is rate-independent — unlike DSCR, it doesn't flex when rates move. Bank CRE lenders often require 8-9%; CMBS and debt funds 10%+; hotels 11-13%. This calculator compares a proposed loan to both minimum and target thresholds.

At loan request time, underwriters often use a higher 'target' DY than the minimum to build cushion for NOI erosion during hold. Paper your pro forma to the target, not the minimum.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Commercial Debt Yield Calculator is built to give a quick, browser-based estimate for commercial debt yield. Debt yield is the lender's 'what would I make if I foreclosed tomorrow?' number. Because it's rate-independent, it's the most durable size constraint. This calculator compares current DY to both the minimum (closing threshold) and target (underwriting cushion) and returns the max loan at each level. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the commercial debt yield result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this commercial debt yield estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter stabilized NOI and proposed loan amount.
Enter lender minimum DY and your target DY for sizing.
Read current DY and max loans at both thresholds.

Frequently Asked Questions

Minimum vs target — why both?

Minimum is the lender's floor — below that, they won't close. Target is your internal underwriting. Size to target to build cushion; if NOI erodes 10% during hold, you're still above the lender's minimum covenant.

Why asset-class differences?

Hotels and operating-intensive assets (senior living, self-storage management-intensive) need higher DY because NOI is more volatile. Triple-net office is most stable — lowest required DY.

Agency multifamily?

Fannie Mae and Freddie Mac typically 7-8% minimum DY on core multifamily. Non-core locations and older product: 9%+. Debt yield is often the binding constraint, not LTV or DSCR on agency deals.