CRE Loan Sizing Calculator
Size a commercial mortgage across all three lender constraints: DSCR, LTV, and debt yield. See the binding constraint and maximum proceeds.
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How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Enter property income and value
NOI drives income-based sizing, while property value drives the collateral leverage cap.
Loan Sizing Formula
Commercial mortgage proceeds are constrained by the lender's collateral test, payment coverage test, and debt yield floor. The modeled ceiling is the lowest result; other requirements can reduce actual proceeds.
Read the calculation methodology and limitations.
Max by LTV = Property Value x Max LTV
Max by DSCR = (NOI / Min DSCR) / Loan Constant
Max by Debt Yield = NOI / Min Debt Yield
Maximum Loan = MIN(Max by LTV, Max by DSCR, Max by Debt Yield)If LTV supports $12.0M, DSCR supports $10.8M, and debt yield supports $11.5M, the maximum loan is $10.8M and DSCR binds.
See This Calculator in Action
Explore institutional underwriting examples. Load any scenario into the live calculator with one click to customize rates, amortization, and property valuation.
Full loan sizing
Max by LTV = Property Value x Max LTVWhen multiple constraints are available, the lender sizes to the lowest supported loan amount.
Underwriting Metric Comparison & Lender Sizing Standards
Compare debt yield against DSCR and LTV constraints, and review typical sizing assumptions across lender types.
Loan Sizing Constraints
3 Core Sizing TestsNOI / Minimum Debt YieldIncome cushion
(NOI / Minimum DSCR) / Loan ConstantPayment coverage
Value x Max LTVCollateral leverage
| Constraint | Formula | What It Protects |
|---|---|---|
| Debt Yield | NOI / Minimum Debt Yield | Income cushion |
| DSCR | (NOI / Minimum DSCR) / Loan Constant | Payment coverage |
| LTV | Value x Max LTV | Collateral leverage |
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| DSCR binds | High rates reduce payment coverage | Max loan follows the DSCR output |
| LTV binds | Value is low relative to NOI | Collateral cap produces the lowest loan |
| Debt yield binds | Lender requires a 10% income floor | NOI / 10% caps proceeds |
Conversion reference
| Constraint | Driven By | Often Binds When |
|---|---|---|
| LTV | Property value | Appraised value is low or leverage cap is conservative |
| DSCR | NOI, rate, amortization | Interest rates are high or amortization is short |
| Debt Yield | NOI and loan amount | CMBS or lender income floors are strict |
Quick facts
- The binding constraint is the lowest maximum loan result.
- DSCR changes with interest rate and amortization; debt yield does not.
- LTV can look strong while income-based constraints still reduce proceeds.
- Loan sizing is most reliable when all three tests are run together.
Editorial Team
Commercial Real Estate Finance Reviewers
- Calculations reviewed against standard CRE lending formulas for DSCR, LTV, cap rate, and debt yield
- Methodology cross-checked against lender-style loan sizing using NOI, value, loan constant, DSCR, LTV, and debt yield
Our editorial team builds and reviews commercial real estate finance calculators around the way lenders actually size debt: property income, collateral value, annual debt service, and lender risk thresholds. Results are educational screening estimates, not loan quotes, tax advice, legal advice, or a commitment to lend.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
Frequently asked questions
It is the sizing test that produces the lowest maximum loan amount. The lender generally uses that lowest number as the proceeds cap.
Most lenders evaluate LTV, DSCR, and debt yield together, then adjust for property type, market, sponsor quality, reserves, and loan structure.
Higher rates increase annual debt service, which lowers DSCR and reduces the loan amount supported by the same NOI.