CRE Loan Sizing Calculator
Size a commercial real estate loan against the three constraints lenders use, loan-to-value, debt yield, and debt service coverage, and see which one binds.
How a CRE loan is sized
A commercial real estate loan is sized against three tests, and the smallest result controls. Loan-to-value caps the loan at a share of appraised value. Debt yield caps it at NOI divided by a minimum yield. Debt service coverage caps it at the loan whose payments the income covers at a minimum DSCR, which depends on the rate and amortization.
Review these calculations alongside the terms of your bridge loan or commercial real estate facility.
Frequently asked questions
How is a commercial real estate loan sized?
A CRE loan is sized against three constraints, and the lowest one controls. Loan-to-value caps the loan at a percentage of appraised value. Debt yield caps it at net operating income divided by a minimum yield. Debt service coverage caps it at the loan whose payments the income can cover at a minimum DSCR. The binding constraint is the one that produces the smallest loan.
What is the difference between LTV, debt yield, and DSCR?
LTV measures the equity cushion against collateral value. DSCR measures whether the property's income covers the debt payments, so it depends on the interest rate and amortization. Debt yield measures the income return on the loan amount and uses neither the rate nor the market value, which makes it a more stable test across a rate cycle. Lenders apply all three.
Why does debt yield matter when I already use LTV and DSCR?
Low interest rates flatter DSCR and low cap rates inflate value and flatter LTV, so in a frothy market both can permit more leverage than is prudent. Debt yield uses only income and loan size, so it does not move with rates or valuations and acts as a floor on leverage that holds up across the cycle.
Is this calculator a loan commitment?
No. It is a sizing estimate built from the inputs you enter, meant to frame the maximum loan the three standard constraints support. A real facility adds reserves, recourse, sponsor strength, market factors, and lender-specific policy. Validate the inputs and treat the result as a starting point.
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