CRE Loan Sizing Calculator
This free calculator sizes a commercial real estate loan against the three constraints lenders use, loan-to-value, debt yield, and debt service coverage, and shows which one binds. Enter the property value, net operating income, your maximum LTV, minimum debt yield, minimum DSCR, interest rate, and amortization, and it returns the maximum loan under each test and the binding constraint.
How a CRE loan is sized
The smallest of the three results controls. Loan-to-value caps the loan at a share of appraised value, debt yield caps it at NOI divided by a minimum yield, and debt service coverage caps it at the loan whose payments the income covers at a minimum DSCR.
Frequently asked questions
How is a commercial real estate loan sized?
Against three constraints, with the lowest result controlling: LTV (a share of value), debt yield (NOI over a minimum yield), and DSCR (the loan whose debt service the income covers at a minimum coverage). The binding constraint is the one producing the smallest loan.
Why does debt yield matter alongside LTV and DSCR?
Low rates flatter DSCR and low cap rates inflate value and flatter LTV, so both can permit too much leverage in a frothy market. Debt yield uses only income and loan size, so it holds up across a rate cycle.
One of Zolvo's commercial lending calculators. Estimate only. Zolvo monitors LTV, DSCR, and covenants across a CRE book through portfolio monitoring; see commercial real estate lending.