Loan-to-Cost (LTC) Calculator
Find the loan-to-cost ratio for a project.
Results update as you type.
How it works
Loan-to-cost, or LTC, is a key ratio in real estate development and construction lending, and this calculator computes it. You enter the loan amount and the total project cost, and it returns the LTC ratio as a percentage. The ratio shows how much of a project's total cost, including land, construction, and other expenses, is being covered by borrowed money rather than the developer's own equity. Lenders use LTC to gauge risk and typically cap it, commonly around 70 to 80 percent, requiring the borrower to fund the rest with equity so they have a meaningful stake and a cushion against cost overruns or a drop in value. A lower LTC means the borrower contributes more of their own money and the loan is safer for the lender. LTC is closely related to but distinct from loan-to-value, or LTV: LTC compares the loan to what the project costs to build or buy, while LTV compares it to the finished appraised value. In a strong project the completed value exceeds the cost, so LTV is often lower than LTC. Developers use LTC to structure financing, understand how much equity they must bring, and compare lender terms. Enter the loan amount and total project cost to compute the loan-to-cost ratio.
LTC = loan amount / total project cost × 100
The loan-to-cost ratio divides the loan amount by the total cost of a project, then multiplies by 100. It shows what share of a development or purchase is financed by the loan versus the borrower's own equity. Lenders cap LTC to ensure the borrower has meaningful skin in the game.
Source:Real estate finance
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Worked example
How to use this calculator
- 1
Enter your values
Enter loan amount and total project cost.
- 2
Adjust the options
Fine-tune any options to match your situation.
- 3
Read your result
Loan-to-cost ratio updates instantly as you type — no button to press.
Frequently asked questions
What is the loan-to-cost ratio?
Loan-to-cost, or LTC, is the ratio of a loan amount to the total cost of a real estate or construction project, expressed as a percentage. It shows how much of the project is financed by debt versus the borrower's equity. Lenders use it to assess risk and set how much they will lend.
How do you calculate LTC?
Divide the loan amount by the total project cost and multiply by 100. An $800,000 loan on a $1,000,000 project gives an 80 percent LTC, meaning the borrower funds the remaining 20 percent with equity. The calculator does this instantly from the loan amount and total cost.
What is a typical maximum LTC?
Lenders commonly cap LTC around 70 to 80 percent, though it varies by lender, project type, and market conditions. The cap ensures the borrower contributes meaningful equity, reducing the lender's risk and giving the developer a stake. A lower LTC generally means safer, more conservative financing.
How is LTC different from loan-to-value?
Loan-to-cost compares the loan to what the project costs to build or buy, while loan-to-value, or LTV, compares it to the finished appraised value. In a profitable project the completed value exceeds the cost, so LTV is often lower than LTC. Lenders may apply both ratios and lend based on whichever is more conservative.
Why does LTC matter to developers?
LTC determines how much of a project a developer must fund with their own equity versus borrowed money. A higher allowable LTC means less equity required and more leverage, but also more debt and risk. Developers use LTC to structure financing, plan equity contributions, and compare loan offers from different lenders.