Loan constant, DSCR, debt yield, and debt service for commercial mortgages
Loan Constant (K) = Annual Debt Service ÷ Original Loan Amount. A lender's required loan constant tells you what annual cash flow is needed per dollar borrowed — useful for comparing loan offers and assessing commercial deals.
Loan Parameters
Net Operating Income (NOI)
NOI = Annual Gross Rental Income − Operating Expenses (before debt service and income taxes). Use actual or projected figures.
Loan Constant & Debt Service
Loan Constant (K)
—
annual DS ÷ loan amt
Monthly P&I
—
Annual Debt Service
—
Debt Yield
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DSCR — Debt Service Coverage Ratio
0.0x0.5x1.0x1.5x2.0x+
DSCR
—
NOI ÷ debt service
Max Affordable Loan
—
LTV (on NOI cap)
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Income & Expense Breakdown
DSCR Guide: Most commercial lenders require DSCR ≥ 1.20x–1.25x. Apartment loans may accept 1.15x. Below 1.0x means the property doesn't generate enough income to cover debt service.
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This calculator provides estimates for educational purposes only. Actual loan terms, NOI, and DSCR requirements vary by lender and property type. Consult a commercial mortgage broker before making lending decisions.