Include mortgage in NOI?

[Slade S.]

I'm crunching numbers on my first potential deal. I've read that a mortgage payment shouldn't be included in calculating the NOI. Is this true? And if so, why is it not considered an operating cost?

Here is my deal, any input?

ANNUAL INCOME: $16,800

unit 1: $700/month

Unit 2: $700/month

ANNUAL COSTS: $11,700

Property tax: 2300

Insurance: 2200

Owner Electric: 600

NOI = $11,700

Cap Rate = $12.3%