How loan to cost is worked out
LTC is the loan divided by the total project cost: purchase, rehab and closing or holding costs. Lenders also cap the loan as a share of the ARV, and the lower cap sets the most you can borrow.
Worked example
A $300,000 purchase, $80,000 rehab and $10,000 of closing costs come to $390,000. A $330,000 loan is 84.6% of cost and 66.0% of a $500,000 ARV. At 90% LTC and 75% of ARV, the most you could borrow is $351,000. With the $330,000 loan you'd bring $60,000.
A $150,000 purchase and $100,000 rehab with a $200,000 loan is 80.0% LTC.
Typical limits
Hard-money and fix-and-flip lenders often fund 85–90% of costs and 70–75% of ARV. The defaults are typical figures, not rules.
What this calculator assumes
Costs as you enter them, with no points or interest added. Some lenders count only purchase and rehab; enter 0 for other costs to match.
Borrowing in the UK?
The country choices above the inputs open separate local pages. UK development lenders compare the loan with costs and the gross development value (GDV). Choosing United Kingdom opens that page and resets the inputs; amounts are not converted.
For the UK version, use the UK loan to cost calculator in pounds.
Inputs for the US LTC loan calculator
Purchase price
What you're paying for the property, in US dollars.
Rehab budget
The cost of repairs and renovation.
Closing and holding costs
Closing costs, permits, insurance and other project costs.
Loan amount
The total loan, including any rehab holdback.
After-repair value (ARV)
What the property should be worth after the work.
Lender's maximum loan to cost
The most they fund as a share of cost.
Lender's maximum loan to ARV
The most they fund as a share of ARV.
CALCULATOR QUESTIONS
US LTC loan calculator questions
How do you calculate LTC for a fix and flip?
Divide the loan by purchase plus rehab plus other costs. $330,000 on $390,000 is 84.6%.
What is a good LTC?
Lenders often go up to 85–90%. A lower LTC means more of your own cash and less risk for the lender.
What's the difference between LTC and LTV?
LTC compares the loan with total cost. LTV usually uses the current as-is value, and loan to ARV the value after repairs. Many flip lenders say LTV when they mean loan to ARV, so ask which they mean.
How much cash do I need for a flip?
Total cost less the loan, plus reserves for overruns.