What a development exit loan does
UK lenders use development exit finance to refinance a completed or near-complete property scheme, repay development funding and allow more time to sell remaining units. LendInvest describes a product with rolled interest and a short term; Shawbrook describes refinancing completed or near-complete developments and allowing more time for sales. Those are lender-specific products, not universal eligibility rules.
This page estimates the new facility against the value entered for the unsold completed units and compares net proceeds with the old lender's redemption amount. It does not decide whether a lender accepts a property, borrower, valuation, planning status, sales evidence or exit plan. Use the actual valuation and written quote.
The intended use is a business-property refinance at completion or near completion. This is not a home-mortgage affordability calculator or a scheduled principal-and-interest repayment calculator.
How the facility limit is estimated
First, the entered eligible value is multiplied by the quoted maximum LTV. That produces a facility limit on the basis you select: gross opening facility or debt due at redemption. The formula then solves for the net advance that fits below that limit after applying the selected fee and interest treatment.
For example, if completed unsold units are valued at £3,000,000 and a lender quotes a 65% limit, the selected-basis facility limit is £1,950,000. That is not a promise that a lender will advance £1,950,000: eligibility, valuation, other security, fees, interest and the lender's exact LTV definition can reduce the offer.
The current development loan is assumed to be repaid in full from the new facility. If another charge remains on the property or the lender requires a different priority, this simplified comparison does not calculate combined security exposure.
Interest and fee methods must match the quote
Choose the new lender's method. Retained simple interest is calculated on the opening balance for the full number of months and withheld from the advance. Deferred simple interest is due at exit without compounding. Monthly compound interest is added to the balance each month. Serviced interest is paid monthly while the principal remains due at exit.
These are distinct contract conventions. For £1,950,000 at 0.75% a month for eight full months, simple interest is £117,000. Monthly compounding is about £120,117.75. A product's use of the phrase rolled-up interest does not establish whether it compounds; follow the lender's written illustration.
Arrangement and exit fees can be based on net proceeds or gross opening debt. Arrangement fees may be paid separately or deducted from the advance. Other costs entered here are separate upfront payments. Check the fee base and timing in the offer so no cost is entered twice.
Worked example: a £206,000 funding gap
Suppose the lender accepts £3,000,000 of completed unsold value and quotes a 65% opening-facility LTV limit. The gross limit is £1,950,000. Use eight months, 0.75% monthly retained simple interest, a 2% arrangement fee based on gross debt, and an arrangement fee deducted from the advance. Set other costs and exit fees to zero.
Retained interest is £1,950,000 × 0.75% × 8 = £117,000. The arrangement fee is £39,000, leaving a net advance of £1,794,000. If the old lender's redemption statement is £2,000,000, the estimated shortfall is £206,000. The new loan's monthly interest equivalent is £14,625, but under this retained method it is withheld upfront, not paid as a monthly instalment.
Reading the shortfall and cash released
The shortfall is the old redemption amount plus separately paid upfront costs minus the new net advance, floored at zero. Cash released is the reverse difference, also floored at zero. They cannot both be positive. The net advance already reflects retained interest and any arrangement fee deducted from the loan.
The redemption amount should come from a current statement and include the old facility's accrued interest, exit fee and charges that must be paid to release its security. The calculator does not estimate that amount from the old loan's original principal or rate.
A positive cash release is an arithmetic remainder, not profit or usable equity confirmed by a solicitor. Taxes, sale costs, legal completion requirements, other secured creditors and lender conditions are outside this calculation.
Limits of this estimate
Rates and fees are editable quote assumptions, not current market averages or guaranteed terms. The 65% default is only an example. Use the lender's actual maximum LTV, fee basis, interest method and payment timing.
The calculation uses whole months and a constant rate. It does not model daily accrual, partial months, early-redemption refunds, minimum-interest periods, extensions, default charges, staged draws, unit-sale proceeds, partial release prices, or a monthly principal-amortisation schedule. It assumes the stated completed value remains the LTV basis throughout the term.
Some lenders may refund unused retained interest or require a minimum return; others may compound rolled interest or impose property-specific release conditions. Ask the lender and solicitor for the binding facility and redemption figures before relying on a completion plan.
Inputs for the development exit loan calculator
Eligible completed value
Enter the lender-accepted value or GDV of unsold completed units securing the new facility, in GBP.
Current development-loan redemption
Use the current written settlement figure, including accrued interest and required exit costs.
Quoted maximum loan to value
Enter the new lender's percentage cap. The default is an editable illustration, not a market quote.
Limit measurement basis
Choose opening gross facility or debt due at redemption to match the lender's stated LTV test.
Quoted interest rate
Enter the percentage from the offer; its period is selected separately. This is a contract input, not APR.
Rate period
Select month, nominal year or effective year exactly as the lender quotes the rate.
Term
Enter the expected term in whole months, from 1 to 60; partial-month daily accrual is not modelled.
Interest payment method
Choose retained simple, deferred simple, monthly compound or serviced interest to match the offer.
Arrangement fee
Enter the quoted arrangement fee as a percentage; set zero if the written offer has none.
Exit fee
Enter the quoted exit fee percentage, or zero if the offer does not charge one.
Percentage-fee basis
Select whether percentage fees are calculated on net cash received or gross opening debt.
Arrangement-fee payment
Choose paid separately or deducted from the advance, following the offer's actual treatment.
Other quoted costs
Enter separately paid legal, valuation or broker costs once; exclude arrangement and exit fees entered above.
CALCULATOR QUESTIONS
UK development exit loan calculator questions
Does a development exit loan repay the development loan?
It is commonly used to refinance development debt on a completed or near-complete scheme, but lender criteria and the amount advanced vary. Use the current redemption statement and an actual offer.
Is development exit interest amortised each month?
There is no universal repayment method. Products may retain, defer, compound or service interest. Many require principal repayment at sale or refinance, so this calculator does not assume monthly principal amortisation.
What does the LTV limit use?
The lender's offer defines whether its limit uses opening gross debt or debt at redemption and which completed units or valuation it accepts. Select the matching basis and enter the accepted security value.
Can the calculator include individual unit sales?
No. It assumes a single facility remains until exit and does not model partial redemptions or unit-release prices. Those conditions must come from the lender's facility agreement.
Is this a US construction-loan takeout calculator?
No. This page covers UK development exit finance in GBP. A US commercial takeout is a separate stabilized-NOI sizing task with LTV and cash-flow constraints, and is not a country twin of this page.
Does a positive cash released result mean the loan is approved?
No. It is only the calculated remainder after the entered redemption balance and separate upfront costs. A lender must approve the borrower, property, valuation, facility and exit plan.