Debt Yield

A ratio that compares the yearly NOI to the total loan amount, often used for loan qualification.

Cindy Bellford avatar
Written by Cindy Bellford
Updated over a week ago

What Is It?

A ratio that compares a property's yearly net operating income to the total loan amount.

The debt yield is often used by lenders to determine loan eligibility, as an indicator of leverage and loan risk.

A lower debt yield indicates higher leverage and therefore higher risk, while a higher debt yield indicates lower leverage and therefore lower risk.

How Is It Calculated?

Debt yield calculation formula

You can learn more about the Debt Yield on our blog.

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