What is mortgage constant?
The annual debt service on a loan expressed as a percentage of the loan amount, for a given interest rate and amortization period. Used to size a loan under the DSCR test (loan = NOI ÷ (DSCR × mortgage constant)).
Where you will use it: this term comes up in the Real Estate Finance course, and the full course glossary collects every term in one place.
Related terms
From the free Real Estate Finance course by Devon Coombs, CPA, MBA.