Loan-to-Cost (LTC) Calculator

Calculate the loan-to-cost ratio for a construction or rehab project. LTC measures the loan against today's all-in cost — the metric most construction lenders use alongside (or instead of) LTV.

Project costs

Purchase price

Rehab / construction

Soft costs (closing, fees)

Loan

Requested loan amount

Lender max LTC

Loan-to-Cost (LTC)

80.5%

loan / total project cost

Total project cost

$323,000

Cash required

$63,000

cost not covered by loan

Lender max loan @ 85% LTC

$274,550

headroom: $14,550

Reading the number

Your requested loan is within the lender's LTC ceiling. Many construction lenders apply both an LTC cap and an LTV-of-ARV cap — the binding constraint is the lower of the two.

LTC differs from LTV: LTC measures the loan against today's all-in cost, LTV measures it against appraised value. For ground-up construction or heavy rehab, LTC is usually the more conservative ratio.

How to Use

Enter the purchase price, rehab/construction budget, and any soft costs (closing, points, permits).
Enter the loan amount you're requesting.
Enter the lender's maximum LTC — common ceilings are 80–90% for value-add projects.
Compare actual LTC to the lender max. If you're over, you'll need to bring more cash or request a smaller loan.
Use this side by side with LTV-of-ARV — most construction lenders apply both caps and use the lower loan amount.

Frequently Asked Questions

What is loan-to-cost?

LTC = loan amount ÷ total project cost. Total project cost is purchase price + rehab/construction + soft costs (closing, fees, permits, sometimes interest reserve). It's the construction lender's primary leverage metric.

How does LTC differ from LTV?

LTV measures the loan against appraised value. LTC measures it against actual cost. For new construction or heavy rehab, costs and value can diverge — lenders use LTC to make sure they aren't financing a project that's worth less than what's spent on it.

What's a typical LTC for a construction loan?

Ground-up construction: 70–80% LTC. Heavy rehab: 80–90% LTC. Light value-add: 85–90% LTC. Stronger sponsors and lower-risk markets get higher leverage.

Do soft costs count toward LTC?

Most lenders include hard costs (acquisition + construction) plus eligible soft costs (architect, permits, interest reserve, sometimes points). Marketing, legal, and operating reserves are typically excluded. Confirm what your lender includes.