Debt Yield
Direct definition
A commercial and investment-property metric equal to NOI divided by loan amount, expressed as a percentage.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Debt yield is independent of interest rate and amortization, giving lenders a pure sense of how much income the property generates per dollar of loan.
Why it matters
It's a useful cross-check to DSCR on investment loans, especially for lenders sizing loan proceeds.
Where you may see it
- Underwriting conditions
- Property income statement
A real-world example
A $1,000,000 loan on a property with $90,000 in NOI has a 9% debt yield.
Educational and illustrative only
A common misunderstanding
Debt yield doesn't factor in interest rate or loan term — it's a simplified ratio of income to loan amount used as a risk cross-check.
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This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026