Work out loan to cost ratio instantly with clear inputs, formula shown and shareable results.
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.
Loan to cost
LTC = loan amount / total project cost x 100
Equity
Equity required = total cost - loan permitted
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.
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.
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.