Loan-to-Cost (LTC) Calculator
Calculate commercial loan-to-cost, total cost basis, and equity required for value-add and construction properties.
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How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Enter loan amount
Start with the proposed loan amount from your lender.
LTC Formula
Loan-to-Cost compares the loan amount to the total cost to acquire and renovate a property. Check bridge funding and holdback assumptions when comparing funded balances with total commitments.
Read the calculation methodology and limitations.
LTC = Loan Amount / Total Cost Basis
Total Cost Basis = Purchase Price + Renovation Costs + Closing CostsA $6M loan on a $5M purchase with $3M in renovations ($8M total cost) results in a 75% LTC.
See This Calculator in Action
Explore institutional underwriting examples. Load any scenario into the live calculator with one click to customize rates, amortization, and property valuation.
Value-add at 80% LTC
LTC = Loan Amount / Total Cost BasisThe loan sits exactly at an 80% cost cap, so any budget overrun has to be funded with more equity.
Underwriting Metric Comparison & Lender Sizing Standards
Compare debt yield against DSCR and LTV constraints, and review typical sizing assumptions across lender types.
Loan Sizing Constraints
3 Core Sizing TestsNOI / Minimum Debt YieldIncome cushion
(NOI / Minimum DSCR) / Loan ConstantPayment coverage
Value x Max LTVCollateral leverage
| Constraint | Formula | What It Protects |
|---|---|---|
| Debt Yield | NOI / Minimum Debt Yield | Income cushion |
| DSCR | (NOI / Minimum DSCR) / Loan Constant | Payment coverage |
| LTV | Value x Max LTV | Collateral leverage |
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Value-add acquisition | $8M loan / ($7M purchase + $3M renovation) | 80% LTC |
| Ground-up construction | $20M loan / $30M total budget | 66.67% LTC |
| Equity check | LTC at 80% on $10M cost basis | $2M equity required |
Conversion reference
| Metric | Denominator | Typical Use Case |
|---|---|---|
| LTC | Total Cost Basis | Value-add, construction, and heavy rehab |
| LTV | Stabilized Appraised Value | Permanent financing and light turnarounds |
Quick facts
- LTC is the primary leverage constraint for construction lenders.
- A high LTC project usually transitions to an LTV-constrained permanent loan upon stabilization.
- Total cost basis includes both hard costs (renovations) and soft costs (financing, legal).
Editorial Team
Commercial Real Estate Finance Reviewers
- Calculations reviewed against standard CRE lending formulas for DSCR, LTV, cap rate, and debt yield
- Methodology cross-checked against lender-style loan sizing using NOI, value, loan constant, DSCR, LTV, and debt yield
Our editorial team builds and reviews commercial real estate finance calculators around the way lenders actually size debt: property income, collateral value, annual debt service, and lender risk thresholds. Results are educational screening estimates, not loan quotes, tax advice, legal advice, or a commitment to lend.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
Frequently asked questions
Loan-to-Cost (LTC) is the ratio of a loan to the total cost of a project, including purchase price and renovations.
LTC uses the total project cost as the denominator, while LTV uses the property's appraised value. LTV is typically used for stabilized assets, whereas LTC is used for projects requiring significant capital improvements.