Commercial real estate loan sizing calculator
A lender sizes to the most conservative of its tests. Enter NOI, value and the lender's terms to see the loan each test allows, and which one binds.
Illustrative only. Not a quote, commitment or credit decision from any lender.
The formula
Max loan = min( NOI ÷ (min DSCR × loan constant), value × max LTV, NOI ÷ min debt yield )
How to use it
- Enter underwritten NOI, not the sponsor's pro forma. Lenders size on in-place or stressed income.
- Use the lender's quoted rate or a stressed rate, and the amortization they offer. Set 0 for interest-only.
- Enter the lender's minimum DSCR, maximum LTV and minimum debt yield. Set any test to 0 to ignore it.
- Read the binding constraint. That is the number your request has to beat, or the lender you should not send it to.
Go deeper
GuideHow to size a commercial real estate loan →Questions
Which constraint usually binds?
It depends on rates and the asset. When rates are high, DSCR often binds before LTV. On low-cap-rate assets, debt yield can bind even when DSCR and LTV look fine.
What is a loan constant?
Annual debt service divided by the loan amount. It folds the rate and amortization into one number, which is why DSCR sizing uses it.
Does this replace a lender's sizing?
No. It is a quick check with your inputs. Each lender applies its own underwriting adjustments, reserves and stress tests.
One closed deal covers the year.
Start on the introductory rate and see a package come out of a real deal this week.