Maximum Loan Amount: Combining LTV, DSCR, and Debt Yield

What the combined maximum answers

The Maximum Loan Amount Calculator estimates one proposed first mortgage under three simultaneous property-level constraints:

1. LTV maximum = property value × maximum LTV
2. Debt Yield maximum = annual NOI ÷ target Debt Yield
3. DSCR maximum = supported monthly principal and interest inverted to loan principal

Methodology review: July 19, 2026 · Calculator formula version maximum-loan-amount@1.0.0

The lowest of those amounts is the combined modeled maximum. It is called the binding constraint because increasing either of the other limits would not raise the result.

This is a preliminary deal-analysis question, not a borrower qualification result. The calculator does not evaluate credit, liquidity, net worth, guarantees, property eligibility, reserves, lender concentration, pricing, fees, or legal approval.

Keep value, NOI, and debt scope consistent

All three constraints need to describe the same property and proposed loan.

The property-value input should use the value basis required for the analysis. DealYield does not decide whether a lender will use purchase price, appraised value, a lower value, or another adjustment.

The annual NOI input follows the operating convention documented by noi@1.0.0: effective gross property income minus recurring operating expenses for the same annual period, before debt service, financing fees, depreciation, income taxes, acquisition and sale costs, and one-time capital projects. Use the NOI Calculator to review the income, vacancy, expense, and reserve assumptions behind the number.

The modeled loan is one proposed first-mortgage principal. Existing liens, subordinate debt, combined-loan-to-value tests, financed fees, and future draws are outside version 1.

LTV-supported maximum

Loan-to-value compares debt principal with a selected collateral value:

LTV = loan amount ÷ property value

Reversing the formula gives:

LTV maximum loan = property value × maximum LTV

For a $1,400,000 property and an editable 75% maximum LTV, the modeled LTV limit is:

$1,400,000 × 75% = $1,050,000

The selected percentage is an assumption, not a universal maximum.

Debt-Yield-supported maximum

Debt Yield compares annual NOI with debt principal:

Debt Yield = annual NOI ÷ loan amount

The inverse implemented by debt-yield@1.0.0 is:

Debt Yield maximum loan = annual NOI ÷ target Debt Yield

With $100,000 of annual NOI and an editable 10% target:

$100,000 ÷ 10% = $1,000,000

Debt Yield does not directly depend on interest rate or amortization. Review the Debt Yield Calculator and Debt Yield guide for the forward ratio, NOI differences, debt-scope caveat, and target sensitivity.

DSCR-supported debt service and principal

DSCR compares annual NOI with annual debt service:

DSCR = annual NOI ÷ annual debt service

At a selected target:

Maximum annual debt service = annual NOI ÷ target DSCR

For $100,000 of NOI and a 1.25x target, annual debt service is $80,000, or $6,666.67 per month.

The calculator then safely reverses the fixed-rate amortizing-payment formula. With monthly payment P, monthly interest rate r, and amortization months n:

DSCR maximum principal = P × (1 - (1 + r)^(-n)) ÷ r

At a 0% rate, principal is P × n, avoiding division by zero.

At 7.25% with 30-year amortization, the example's DSCR-supported principal is $977,264.51. Review the DSCR Calculator for coverage analysis and the Mortgage Payment Calculator for payment phases, fees, and balance schedules.

Worked combined example

The representative inputs produce:

• LTV limit: $1,050,000.00
• Debt Yield limit: $1,000,000.00
• DSCR limit: $977,264.51
• Combined modeled maximum: $977,264.51
• Binding modeled constraint: DSCR

At that combined principal, modeled LTV is 69.80%, Debt Yield is 10.23%, and DSCR is 1.25x.

If two limits are equal at displayed cent precision, DealYield lists both in deterministic LTV, Debt Yield, then DSCR order. It does not silently choose one label.

Loan term, amortization, and balloon balance

Amortization determines the monthly payment used for DSCR sizing. Loan term determines when the modeled balance becomes due.

In the example, 30-year amortization spreads scheduled payments across 360 months, while the 10-year term ends after 120 payments. The estimated balance at that maturity is $843,480.42.

That amount may need to be paid, refinanced, extended, or otherwise resolved. It is not a fourth loan-sizing constraint and DealYield does not predict refinancing availability.

The Office of the Comptroller of the Currency's Commercial Real Estate Lending handbook discusses LTV, DSCR, Debt Yield, amortization, and balloon risk as related but distinct underwriting considerations.

Why interest-only sizing is excluded

Version 1 does not use a temporary interest-only payment to increase the DSCR-supported principal.

Lenders may analyze an interest-only loan using an as-if amortizing payment, a stressed rate, a different amortization period, or product-specific requirements. For example, Fannie Mae's DUS term sheet shows that term, amortization, interest-only availability, maximum LTV, and minimum DSCR vary by product and property.

If the actual analysis supplies an underwriting rate and amortization, enter those assumptions. Use the separate Mortgage Payment Calculator to explore temporary interest-only cash payments without treating them as a universal loan-sizing rule.

Zero, negative, and unavailable states

• A property value of zero or less is invalid because LTV cannot be sized against it.
• A 0% maximum LTV is valid and produces a $0 LTV limit.
• A target Debt Yield or DSCR of zero is invalid because the inverse would divide by zero.
• Zero annual NOI supports no positive combined loan. The result is explicitly labeled rather than allowing the positive LTV limit to appear achievable.
• Negative annual NOI also supports no positive combined loan. Negative debt service or negative loan principal is never presented as a maximum.
• At a $0 combined loan, Debt Yield and DSCR ratios are unavailable because their debt denominators are zero.
• Non-finite and impossible loan schedules pause results instead of producing infinity or NaN.

Interest-rate sensitivity

The sensitivity view reruns maximum-loan-amount@1.0.0 at the base interest rate and shifts of −1.00, −0.50, +0.50, and +1.00 percentage points.

Only the DSCR-supported principal changes directly. LTV and Debt Yield stay fixed. This makes constraint switching visible: a lower rate may move the binding limit from DSCR to Debt Yield, while a higher rate may reduce the DSCR limit.

These rows are assumption tests, not forecasts or probabilities.

Lender definitions and the no-qualification boundary

Lenders and loan programs may differ on:

• Property-value source and adjustments
• Trailing, current, projected, or underwritten NOI
• Vacancy, management, replacement reserves, and capital expenses
• Senior-loan versus total-debt scope
• Stress interest rate and amortization
• Minimum DSCR, maximum LTV, and target Debt Yield
• Interest-only treatment and balloon policy
• Borrower credit, liquidity, net worth, guarantees, and experience
• Minimum and maximum loan size, fees, escrows, and reserves

Use documented inputs for the actual analysis and keep their sources visible. An editable example target is not evidence that a lender uses it.

The combined maximum is an educational property-level estimate. It is not lending advice, qualification, approval, denial, pricing, an appraisal, or a commitment to lend.