Loan To Cost Ratio Calculator

Work out loan to cost ratio instantly with clear inputs, formula shown and shareable results.

About Loan To Cost Ratio Calculator

Loan to cost compares the construction loan with the total cost to deliver the project, including land, hard and soft costs and finance charges. Development lenders use it alongside loan to value because during construction there is no stabilised value to lend against, only cost incurred.

Formulas

Loan to cost

LTC = loan amount / total project cost x 100

Equity

Equity required = total cost - loan permitted

Worked example

With the default values below, Loan To Cost Ratio Calculator returns Loan to cost ratio of 72.73%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Loan amountminimum 0: 8,000,000
Total project costminimum 0.01: 11,000,000
Maximum permitted LTCaccepts 1–100 %: 75 %

Results

Loan to cost ratio: 72.73% %
Maximum loan permitted: $8,250,000.00
Equity required: $3,000,000.00
Assessment: Within the lender's loan to cost limit

Step by step

1Values used
2Loan to cost
3Equity
4Loan to cost ratio= 72.73 %
5Maximum loan permitted= 8,250,000.00
6Equity required= 3,000,000.00
7Assessment= Within the lender's loan to cost limit

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is the Loan To Cost Ratio figure worked out?

LTC = loan amount / total project cost x 100. Loan to cost compares the construction loan with the total cost to deliver the project, including land, hard and soft costs and finance charges.

How does it differ from loan to value?

Loan to cost looks backward at what was spent, loan to value forward at what the finished asset is worth. A profitable scheme has a lower LTV than LTC, and lenders test both.

What values do I need to enter?

This calculator takes 3 inputs: Loan amount, Total project cost, Maximum permitted LTC. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.