Why compare the exit loan rate with your development loan
A development exit loan repays the development finance once the build is complete and the units are for sale or let. Its rate is usually lower than the development loan's, because the building work, and the risk that comes with it, is finished. The saving depends on the balance, the two rates and how long it takes to sell.
UK exit lenders usually quote a monthly rate, so this page compares monthly rates on the same balance and for the same number of months, using the same interest method for both loans. Choose rolled up and compounded monthly, or paid monthly, to match your quotes.
Rate, fees and the all-in monthly cost
A lower rate can be offset by fees. Arrangement and exit fees are shown as a percentage of the balance, and the all-in monthly cost adds them to the interest and divides by the balance and the number of months. It lets you compare a cheaper rate with a bigger fee against a dearer rate with a smaller one. It is not an APR.
Worked example: refinancing a £2,000,000 balance
A development loan at 1.1% a month has £2,000,000 left to repay. An exit loan at 0.75% a month, which is 9% a year when multiplied by twelve, repays it for eight months, with interest rolled up and compounded monthly. Interest on the exit loan is £123,197.70.
A 1.5% arrangement fee is £30,000, so interest and fees come to £153,197.70, an all-in 0.957% a month. Keeping the development loan for the same eight months would cost £182,927.14 in interest, so the exit loan has £59,729.44 less interest than your current loan.
What this page leaves out
It compares interest and the fees you enter. It does not size the exit facility against the value of the units, model sales that repay part of the loan early, or check lender criteria. Use the development exit loan calculator to see how much an exit lender could advance.
To size the facility against the redemption balance, use the UK development exit loan calculator .
To see the interest on the development loan itself, use the UK development loan interest calculator .
Use the right country page
This page stays in pounds and uses UK terms: a development exit loan and a monthly rate. The country choices above the inputs open separate local pages. Choosing United States opens the US takeout loan interest rate calculator, which compares an annual rate and points on the loan that repays a construction loan. The inputs reset and amounts are not converted.
Inputs for the development exit loan interest rate calculator
Development loan balance to repay
What the exit loan repays, including any rolled-up interest.
Current development loan rate
The rate you pay now, not the APR.
Exit loan rate
The rate on the exit loan, not the APR.
Both rates quoted per
Month for monthly rates. Year (nominal) divides annual rates by 12.
Time you expect to keep the new loan
Whole months. The current loan is priced over the same time.
How interest is paid
Rolled up and compounded monthly, or paid monthly. Used for both loans.
Arrangement fee
A percentage of the balance, paid on the exit loan.
Exit fee
A percentage of the balance, paid when you repay the exit loan. Enter zero if none.
CALCULATOR QUESTIONS
UK development exit loan interest rate calculator questions
What interest rate do development exit loans charge?
It depends on the lender, the loan to value and the units. Enter the rate in your quote; the calculator shows what it costs and how it compares with your current loan.
Is a development exit loan cheaper than development finance?
Often the rate is lower because the build is finished, but fees matter too. Compare the all-in monthly cost rather than the rate alone.
How is the all-in monthly cost worked out?
Interest plus the arrangement and exit fees, divided by the balance and by the number of months. In the worked example it is 0.957% a month.
Does it matter how interest is paid?
Yes. Rolled-up interest compounds, which costs more than paying monthly at the same rate. The calculator uses the same method for both loans.
What happens when I change country?
The United States option opens the separate US takeout loan interest rate page, in dollars, with annual rates and points. Your inputs are reset rather than converted.