Loan to Cost Calculator

Calculate Loan to Cost (LTC)



Formula

The formula to calculate the Loan to Cost (LTC) is:

\[ LTC = \frac{LA}{CC} \]

Where:

What is Loan to Cost?

Loan to Cost (LTC) is a financial metric used to assess the ratio of the loan amount to the total construction cost of a project. It helps lenders and investors evaluate the risk and feasibility of financing a construction project.

Example

Let's say the loan amount (LA) is \$500,000 and the construction cost (CC) is \$1,000,000. Using the formula:

\[ LTC = \frac{500,000}{1,000,000} = 0.50 \]

So, the Loan to Cost (LTC) is 0.50 or 50%.