The metrics lenders underwrite

Lenders do not underwrite stories. They underwrite numbers, and there are five that matter above all others.

LTV (loan to value) and LTC (loan to cost) tell the lender how much of the asset they are funding relative to the price or total cost. A conservative senior lender might cap at 55–60% LTV for a new asset, or 65–70% LTC for a development. Go higher and you need mezzanine or you need to bring more equity.

DSCR (debt service coverage ratio) is the lender's safety margin. It is NOI divided by debt service, and most lenders want 1.25–1.40x or higher. Below 1.20x and the deal is usually declined; above 1.50x and you may have room to increase leverage.

Debt yield is NOI divided by loan amount, expressed as a percentage. It strips out interest rate and amortisation assumptions and gives a clean, stress-testable measure of how much income the asset produces relative to the debt. A 10% debt yield is a common minimum for office and retail; industrial and logistics can run lower.

Covenants are the rules. They include DSCR minimums, LTV maximums, interest reserve requirements, and restrictions on distributions. Breach a covenant and the lender can accelerate, block dividends, or take security enforcement action. Read them carefully: the covenant package matters more than the headline rate.