Development Finance Calculator
Size the maximum senior debt against loan to cost and loan to GDV, see the equity you need to put in, and check whether the scheme clears the profit-on-cost threshold lenders underwrite to. No email required, nothing stored.
- Maximum senior debt
- £1,200,000
- Equity you need to inject
- £300,000
- Total build and land cost
- £1,500,000
- Finance interest
- £128,250
- Arrangement fee
- £24,000
- Sales and disposal costs
- £72,000
- Projected profit
- £675,750
- Profit on cost
- 39.2%
Capped by loan to cost
Assumes build funds draw progressively
28.2% on GDV
At 39.2% profit on cost the scheme clears the ~20% threshold senior lenders typically underwrite to, with a return on equity of 225.3%. Stress it at a 10% GDV fall before you commit.
Indicative only. Interest is modelled on the land facility plus an average drawn balance of half the build facility across the term; real drawdown schedules, monitoring surveyor fees, valuation and legal costs will change the outcome. Not a quote or a recommendation.
The three numbers that decide the deal
Whichever cap bites first. Senior debt is the lower of loan to cost and loan to GDV. If GDV is the binding constraint, a more optimistic sales assumption will not fix it — lenders use their valuer's figure, not yours.
Profit on cost below 20% is where most senior lenders decline. Mezzanine or stretched senior can bridge the equity gap, at a price that only works when the margin is genuinely there.
Interest is on the drawn balance, not the facility. A well-structured drawdown schedule can save a meaningful share of the finance cost on a 15–18 month scheme.
A £3.2m GDV scheme of nine houses
Land at £700,000, build cost £1.6m, professional fees and contingency £220,000 — total cost £2.52m against a £3.2m GDV. Senior debt at 65% of GDV is £2.08m; at 85% of cost it is £2.14m. The GDV cap bites, so the facility is £2.08m and the developer injects £440,000 of equity.
Over an 18-month term at 9% on an average drawn balance, interest is roughly £160,000, with a 2% arrangement fee of £41,600 and a 1% exit fee. Sales and disposal costs at 2% of GDV are £64,000.
Profit lands near £390,000 — about 15% on cost. That is below the 20% most senior lenders underwrite to, and the fix is a lower land price or a mezzanine layer, not a bigger senior facility. Re-run your own numbers above before you exchange on the site.
Have the scheme appraised against live lender criteria
Send us the four details every development lender asks first and we will tell you what gearing is genuinely available, which cap will bite, and whether mezzanine is the cheaper answer to your equity gap.
Email me these figures and indicative terms
Tell us the four things every lender asks first. We come back with realistic terms, usually the same working day.
Development finance questions, answered
How much can I borrow on a development finance facility?
Senior development debt is normally capped at the lower of 65%–70% of gross development value and 85%–90% of total project cost. Whichever bites first sets your facility, so an optimistic GDV assumption rarely raises the loan — lenders underwrite to their own valuer's figure.
What profit on cost do lenders want to see?
Around 20% profit on cost is the usual threshold for senior lenders. Below that, the scheme has too little headroom to absorb a build overrun or a softer sales market, and the answer is generally to revisit land price or build budget rather than to gear up further.
How is interest charged on development finance?
On the drawn balance, not the facility. Land is drawn on day one, build funds come in monthly arrears drawdowns against a monitoring surveyor's valuation, so effective interest over the term is far lower than the headline rate applied to the full facility.
What are typical development finance rates in 2026?
Senior debt commonly prices between 7% and 11% per annum all-in, with a 1.5%–2% arrangement fee and a 1% exit fee on GDV or loan. Mezzanine sits at 12%–20% per annum. Rates move with the sponsor's track record as much as with the scheme itself.
Can I get 100% development finance?
Not as pure senior debt. The equivalent is senior debt stretched to 90% of cost with mezzanine or a joint-venture partner covering the balance, which means giving up either a high coupon or a profit share. It works on schemes with genuinely strong margins and an experienced developer.
What costs are outside the facility?
Valuation, monitoring surveyor fees, both sets of legal costs, and often the professional team's initial fees. Budget 1.5%–2.5% of the facility for these, and note that most lenders will not fund the land's SDLT.