How loan to cost is worked out
LTC is the loan divided by the total project cost: land, build and fees. Loan to GDV divides the loan by the finished value. Development lenders limit both, so the most they'll lend is the lower of the two.
Worked example
Land at £500,000, build costs of £750,000 and £100,000 of fees make £1,350,000. A £1,000,000 loan is 74.1% of cost and 55.6% of an £1,800,000 GDV. At 80% of cost and 65% of GDV the most you could borrow is £1,080,000. With the £1,000,000 loan you'd put in £350,000.
Typical limits
Senior development lenders typically lend around 60–70% of costs and up to about 65–70% of GDV. Up to 85–90% of costs is possible with mezzanine or stretched senior finance, usually for experienced developers and at a higher cost. The defaults are illustrative, not rules.
What this calculator assumes
Costs as you enter them, with no rolled-up interest or lender fees. Interest and fees added to the loan raise the LTC.
To include staged drawdowns and interest, use the UK development loan calculator .
Borrowing in the US?
The country choices above the inputs open separate local pages. US fix-and-flip lenders measure loan to cost alongside loan to after-repair value (ARV). Choosing United States opens that page and resets the inputs; amounts are not converted.
For the US version, use the US LTC loan calculator in US dollars.
Inputs for the UK loan to cost calculator
Land or property cost
What you're paying for the site or building, in pounds.
Build costs
The construction or refurbishment costs.
Fees and other costs
Professional fees, planning, contingency and other costs.
Loan amount
The total facility.
Gross development value (GDV)
What the finished scheme should be worth.
Lender's maximum loan to cost
The most they fund as a share of cost.
Lender's maximum loan to GDV
The most they fund as a share of GDV.
CALCULATOR QUESTIONS
UK loan to cost calculator questions
How do you calculate loan to cost?
Divide the loan by the total project cost. £1,000,000 on £1,350,000 is 74.1%.
What's the difference between LTC and LTGDV?
LTC compares the loan with what the project costs; LTGDV compares it with what the finished project is worth.
What LTC do UK lenders offer?
Senior lenders often go to around 60–70% of costs; up to 85–90% usually needs mezzanine or stretched senior finance.
How much equity do I need?
The total cost less the loan: here £350,000.