Free tool · Loan sizing
Loan sizing calculator.
Enter NOI, value, rate, and the three lender constraints — see the maximum loan each one allows, which constraint binds, and the equity you'll need. No login.
The deal
Lender constraints
e.g. 1.25
$10,500,000
Bound by Max LTV · equity required $4,500,000
Each constraint allows
LTV
70.0%
DSCR
1.32×
Debt yield
9.5%
How lenders size a loan
A lender doesn't offer one number — it offers the smallest of three. LTV caps the loan at a percentage of value. DSCR caps it so income covers the payment by a required margin. Debt yield caps it so the unlevered return on the loan stays above a floor. Whichever produces the lowest amount is the binding constraint, and it sets your loan — and therefore the equity check you have to write.
Which one binds tells you something. In a low-rate, high-price market, DSCR and debt yield usually bind and LTV is slack — the income can't support a loan as big as the value would allow. When rates rise, the DSCR cap tightens fastest, which is why proceeds fall even when prices haven't. This tool sizes DSCR on the fully-amortizing constant, the lender standard even for interest-only loans, so the numbers match how a credit desk actually quotes.
What is the binding constraint?
Of the three caps a lender applies — LTV, DSCR, and debt yield — the one that produces the smallest loan. It sets your proceeds; loosening any other constraint changes nothing until it becomes the binding one.
Why is my loan smaller than the LTV would allow?
Because DSCR or debt yield is binding. When rates are high or the going-in yield is thin, the income cannot service a loan as large as the loan-to-value cap would permit, so proceeds are coverage-constrained, not value-constrained.
Does interest-only increase the loan?
Usually not. Lenders size DSCR on the fully-amortizing payment regardless of an IO period, so IO improves early cash flow without increasing the sized loan amount.
The minimum of three lender caps — LTV, DSCR (on the amortizing constant), and debt yield — the same logic Nivora's engine uses to auto-size debt. New to the metric? Read what DSCR do lenders want. Not investment advice.
See it on a real deal.
In Nivora this runs off your actual rent roll and T-12 — the full monthly model, reconciled to the penny. See it live on a fictional sample deal.