Development Finance Calculator
Our development finance calculator helps property developers and investors assess the viability of a project by modelling key lending metrics including loan to cost (LTC), loan to gross development value (LTGDV), total project costs, funding shortfall and indicative lender exposure.
By entering land value or purchase price, build costs, professional fees, finance costs and projected GDV, the calculator provides a high-level view of how a scheme may be structured from a lender’s perspective.
This tool is designed for early-stage appraisal, whether you are assessing a new opportunity, sense-checking a site acquisition or preparing for a funding discussion. The outputs reflect how development lenders typically assess leverage, risk and scheme viability, but should be treated as an initial guide rather than a credit-approved position.
Indicative drawdown profile only. Not a detailed cashflow model.
| Scenario | Profit after finance | Profit on cost | vs base |
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This calculator is for illustrative purposes only and does not constitute a lending offer or credit approval. Development finance terms depend on the borrower, project, planning status, valuation, costs, professional team and exit strategy. Figures may vary materially.
Understanding Your Development Finance Results
Your development finance results provide a structured view of how a lender is likely to assess your scheme.
Loan to Cost (LTC) shows the proportion of total project costs funded by debt. This is one of the primary constraints in development lending, with most lenders operating within defined LTC limits depending on scheme complexity and borrower experience.
Loan to Gross Development Value (LTGDV) measures the loan against the projected end value of the completed scheme. This acts as a secondary risk control, ensuring sufficient equity remains in the project.
Total development cost brings together acquisition, construction, professional fees, contingency and finance costs. This is the figure lenders focus on when assessing overall exposure and funding structure.
The equity requirement highlights how much capital is needed from the borrower. This is often where deals succeed or fail in practice, particularly where cost overruns or conservative valuations are applied.
Where applicable, the projected profit and profit on cost provide an indication of scheme viability. While lenders do not lend purely on profit, insufficient margin can weaken a case, particularly on more complex or speculative projects.
This calculator should be used as a planning tool. In practice, lenders will also consider planning status, contractor experience, build programme, asset liquidity and exit strategy when assessing a development proposal.
Worked Development Finance Example
To demonstrate how the calculator can be used in practice, consider a typical development finance scenario.
A developer is acquiring a site for £800,000 with planning consent for 4 residential units. Build costs are £600,000, with fees and contingency bringing total non-finance costs to £1,500,000. The projected GDV is £2,200,000.
The scheme is funded at 70% loan to cost, giving an approximate development facility of £1,050,000. The loan is priced at 10% per annum over a 12-month programme, with funds drawn progressively in line with build costs on an S-curve basis. Interest is rolled up and repaid on exit.
Because the full facility is not drawn from day one, interest accrues on a rising balance as the project progresses. Based on this drawdown profile, total interest is estimated at approximately £85,000. This increases total project costs to £1,585,000. Against a GDV of £2,200,000, the projected profit is £615,000, equating to a profit on cost of around 38.8%.
A 3-month delay to this project would increase interest to c.£105,000, reducing profit to c.£595,000.
This indicative example illustrates how interest, timing and drawdown structure directly affect scheme viability. Even where headline margins appear strong, the cost of finance can materially reduce the final return.
Lender Insight on Development Finance
Development finance is not assessed on a single metric. While LTC and LTGDV provide a framework, lenders ultimately underwrite the quality of the scheme.
Projects with strong planning, experienced developers and clear exit routes can achieve higher leverage and more competitive pricing. In contrast, schemes with planning risk, complex build elements or weaker locations may be restricted regardless of headline figures.
Cost credibility is a key focus. Lenders will scrutinise build costs, contingency allowances and programme timelines, often relying on monitoring surveyors to validate assumptions before and during the build.
Exit strategy is equally important. Whether the project is intended for sale or refinance, lenders need confidence that the completed units can be sold or let within a reasonable timeframe.
This calculator reflects typical market parameters, but real-world outcomes depend on how a scheme is presented, structured and positioned to lenders.
When To Use This Calculator
This calculator is a useful took that can be used in a range of scenarios such as when you are:
- assessing a new site or opportunity
- sense-checking deal viability before offering
- preparing for a funding discussion
- comparing different development scenarios
Reach out to our specialist team for further assistance and a more detailed review of current market rates.
What This Calculator Does and Doesn't Do
This calculator models typical development finance metrics based on the inputs provided. It does not account for lender-specific criteria, site-specific risks, abnormal costs, planning constraints or valuation adjustments. Outputs should be used as a guide only and not relied upon as a funding offer.
Development Finance Calculator FAQs
Loan to cost is the percentage of total development costs funded by the lender. Most lenders cap this between 60% and 75% depending on the scheme and borrower experience.
LTGDV measures the loan against the projected end value. It provides a secondary risk control for lenders and typically ranges between 55% and 65%.
No. It models typical market parameters. Individual lenders will apply their own limits, pricing and underwriting approach.
Build costs should be ultimately be based on realistic actual estimates and/or QS input. For an initial viability a ballpark estimate may be appropriate, however for application of a development facility lenders will want to see a robust cost schedule. Lenders will often instruct their own monitoring surveyor to validate costs before funding.
Yes. The calculator can be used for consented land and development schemes, although early-stage or planning-led deals may require different funding structures.
No. Development lending is highly case-specific. Planning, experience, contractor strength and exit all influence lender appetite.
