Net operating income divided by the loan amount, expressed as a percentage; a leverage-independent measure lenders use to size loans and gauge downside risk.
Related terms
- Drawdown
The act of drawing funds from a committed loan facility or of a fund calling capital from its LPs; the point at which committed money is actually deployed.
- Escrow
A neutral account holding buyer funds until contractual conditions are met, protecting off-plan buyers.
- Gearing
The proportion of debt to equity funding an asset or portfolio; higher gearing amplifies both returns and losses.
- Ijara
A Sharia-compliant lease in which the bank owns the asset and leases it to the client for rent, often with an option to purchase; the Islamic equivalent of a f…
- Installment plan
Developer-provided financing under which buyers pay in scheduled instalments, common in off-plan sales.
- Interest-only loan
A loan on which only interest is paid during the term, with principal due at maturity.
- Islamic finance (Sharia-compliant)
Financing structured to comply with Sharia law, which forbids interest (riba) and excessive uncertainty; returns come from profit-sharing, leasing, or trade ra…
- Leverage
The use of borrowed money to amplify returns (and losses) on equity.