Direct answer
What does Debt service mean?
The scheduled principal and interest payments required on debt for a stated period.
Exam cue: In investment analysis, NOI is calculated before debt service.
What does it look like in a question?
New York example
A property produces $80,000 of NOI and requires $50,000 in annual mortgage payments.
Common exam trap
What should you not confuse it with?
Debt service is not an operating expense in the standard NOI formula.
Related real estate finance terms
AmortizationRepayment of debt through scheduled payments that reduce principal over time.Balloon paymentA final payment that is substantially larger than the preceding scheduled payments.EquityThe owner's value in property after subtracting liens from the property's value for the calculation being used.ForeclosureThe legal process used to enforce a mortgage lien after default and subject the property to sale or another court-ordered remedy.Loan-to-value ratioThe loan amount expressed as a percentage of the applicable property value or price.MortgageA security instrument that creates a lien on real property to secure repayment of a debt.
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The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
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