$500k loan on $700k cost
- LTC = 500,000 ÷ 700,000 = 71.4%
- Equity required = $200,000
finance calculator
Loan-to-Cost (LTC) Calculator
Calculate loan-to-cost and required equity for construction or bridge loans.
Results
- Loan-to-cost
- 71.43%
- Equity needed
- $200,000
How to use this calculator
- Enter the loan amount you expect from the lender.
- Enter total project costs (purchase + rehab/soft costs).
- See LTC percentage and how much equity you need to cover the remainder.
Inputs explained
- Loan amount
- The loan proceeds expected for the project.
- Total project cost
- All-in costs: purchase price, rehab/renovation, permits, soft costs, contingency.
How it works
LTC = Loan amount ÷ Total project cost.
Equity required = Total project cost − Loan amount.
Formula
LTC = Loan ÷ Total cost Equity = Total cost − Loan
When to use it
- Checking if your deal meets a lender’s max LTC (e.g., 70–80%).
- Estimating the equity check needed to close and fund rehab.
- Comparing LTC to loan-to-value (LTV) on appraised value or ARV.
Tips & cautions
- Include contingency in total cost so LTC isn’t understated.
- If lender requires borrower equity before draws, ensure you can fund early costs.
- Pair with LTV to see both cost-based and value-based leverage.
- Snapshot only; does not model draw schedules or interest reserves.
- Excludes financing costs unless you include them in total cost.
- Does not account for future appraised value (use LTV/ARV separately).
Worked examples
$800k loan on $1.1M cost
- LTC ≈ 72.7%
- Equity required = $300,000
Deep dive
Calculate loan-to-cost (LTC) by entering loan amount and total project cost to see leverage and required equity.
Use it for construction and bridge deals to check against lender LTC caps and plan your cash contribution.
FAQs
- What’s a typical max LTC?
- Many lenders cap LTC around 70–85% depending on asset, sponsor, and market.
- How is LTC different from LTV?
- LTC uses total project cost; LTV uses appraised value. For value-add, check both against lender limits.
- Should I include contingency?
- Yes. Include contingency and soft costs so your equity estimate is realistic.
- Does this handle draw schedules?
- No. It’s a snapshot. Funding order and draws depend on lender terms.
- Can I include interest reserve in cost?
- Yes—add financing costs to total cost if you want them reflected in LTC and equity needed.
Related calculators
For quick LTC estimates only. Lender underwriting may adjust eligible costs, reserves, and limits. Confirm terms with your lender.