Debt Yield Margin Calculator

Lenders size loans by debt yield. This calculator shows the cushion between your actual debt yield and the lender minimum, and how much NOI you can lose before a breach.

NOI (annual)

Loan balance

Minimum debt yield required

Debt yield margin (bps)

150

Actual debt yield

10.00%

NOI cushion to breach

$142,500

How the math works

Margin (bps) = (actual DY − minimum DY) × 10,000. Cushion = NOI − breach-level NOI.

Tight debt yield margins break first in a downturn. Size loans so that 15-20% NOI drop still clears the lender minimum. That's real resilience, not wishful stress testing.

How to Use

Enter NOI (net operating income).
Enter loan balance.
Enter minimum debt yield required.
Read actual debt yield, margin, and NOI cushion.

Frequently Asked Questions

What is debt yield?

Debt yield = NOI ÷ loan balance. It's a lender metric immune to interest rates. Most CRE lenders require 8-10% minimum. Higher in distressed-leaning deals.

Why margin matters?

Margin = buffer. A 200bps margin means NOI can drop 20% of loan before breaching. Thin margins trigger covenant violations fast in downturns.

What's healthy?

300-500bps margin is comfortable. Under 200bps = leveraged tight — one bad quarter triggers cash trap or default. Institutional buyers underwrite to 400-500bps minimum.