Loan-to-Cost (LTC) Ratio Calculator

Compute development loan-to-cost (LTC) from loan amount and project cost. Add an optional contingency to stress financing structure and optionally compare debt against stabilized value.

Committed debt principal for the project financing package.
Hard costs, soft costs, fees, and contingency included on a like-for-like basis.
Defaults to 0.00%. Applied to total project cost if entered.
Defaults to blank. If entered, the output also reports implied stabilized LTV.

Educational estimate. Final underwriting terms and covenant definitions are lender-specific.

Examples

  • Loan $18,500,000 and cost $26,500,000, optional fields blank ⇒ Loan-to-cost: 69.81%; Required equity: $8,000,000.00.
  • Loan $42,000,000, cost $56,000,000, contingency 7%, stabilized value $75,000,000 ⇒ Loan-to-cost: 70.09%; Implied stabilized LTV: 56.00%.

FAQ

What is a typical LTC range?

Many lenders target moderate LTC ranges, but acceptable levels depend on asset type, sponsor strength, and market conditions.

Should interest reserve be included in project cost?

Include it if your underwriting and lender term sheet treat it as part of funded total cost.

Why compare LTC with stabilized LTV?

The comparison shows whether the capital stack remains prudent at completion and stabilization assumptions.

Additional Information

  • LTC equals loan amount divided by total project cost, expressed as a percentage.
  • When contingency is entered, adjusted project cost equals cost multiplied by one plus contingency percentage.
  • Required equity equals adjusted project cost minus loan amount, floored at zero.
  • If stabilized value is provided, implied LTV helps compare construction leverage with exit valuation leverage.

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