Free calculator
Loan-to-cost calculator, with LTV beside it
Loan-to-cost divides the loan by what the project costs — purchase price plus renovation budget — while loan-to-value divides the same loan by what the finished property is worth. Construction, value-add and fix-and-flip lenders quote both, and the smaller loan wins. Enter the budget, the target loan, the stabilized value and the two caps, and this calculator returns both ratios, the loan each cap allows, and which one governs.
- 20,000+loan programs screened
- 5–8matches on a typical deal
- under an hourto the median first offer
- Zero upfrontto submit and compare offers
How are loan-to-cost and loan-to-value calculated?
LTC = Target loan amount ÷ Total project cost
LTV = Target loan amount ÷ Stabilized value
What does the calculation look like on a real deal?
| Input | Value |
|---|---|
| Purchase price | $2,500,000 |
| Renovation budget | $500,000 |
| Target loan amount | $2,100,000 |
| Stabilized value | $3,500,000 |
| LTC cap | 70.00% |
| LTV cap | 65.00% |
- Total project cost: $2,500,000 purchase + $500,000 renovation = $3,000,000.
- Loan-to-cost: $2,100,000 ÷ $3,000,000 = 70.00%.
- Loan-to-value against the $3,500,000 stabilized value: $2,100,000 ÷ $3,500,000 = 60.00%.
- Lesser of the two caps: a 70% LTC cap allows $2,100,000 and a 65% LTV cap allows $2,275,000, so cost governs at $2,100,000.
Loan-to-cost70.00%
The loan sits exactly at the cost cap and well inside the value cap, so the equity check is the full 30% of cost — $900,000 — and a stronger appraisal would not lower it. Only a lower budget or a higher cost cap would.
How do you read the result?
Loan-to-cost is the lender’s protection against you: it forces real equity into a project whose value is still a projection. Loan-to-value is its protection against the market: it limits the loan to a share of what the finished property should sell for. On a deal bought well below its finished value the value test is loose and cost governs; on a deal bought at full price the reverse can happen.
The gap between the two caps is where your equity requirement lives. When cost governs, the only ways to borrow more are a smaller budget or a lender with a higher cost cap; a better appraisal changes nothing. When value governs, the appraisal becomes the whole negotiation.
What belongs in total project cost?
The purchase price plus the hard renovation budget. Soft costs — design, permits, closing costs and financing fees — are left out because they are not included in the loan; they are funded with equity. Lenders often exclude developer fees and sometimes cap the land value at the price you paid rather than its appraised value, which lowers cost and, with it, the loan.
How does after-repair value fit in?
After-repair value is the residential name for the stabilized value the loan-to-value cap is applied to, and fix-and-flip and bridge lenders use it the same way: a share of the finished value sets one leg, a share of cost sets the other, and the loan is the smaller. Because that value is an opinion about the future, lenders discount it more heavily than a stabilised appraisal, and some size on cost alone until the work is done.
What happens after you have the number?
A ratio tells you where the deal stands; it does not tell you which lender will like it. You describe the deal once — about five minutes — and it is screened against 20,000+ loan programs. Most deals return 5–8 matches, the median first offer arrives in under an hour, and there is Zero upfront; the fee is 0.50–1.00%, paid only at closing.
YieldStack is a commercial mortgage brokerage, not a lender. The rate, the leverage and the credit decision belong to the lenders competing for your deal; our job is making sure the right ones see it at the same time, so the terms you compare are real competition rather than one desk’s appetite.
Frequently Asked Questions
What is the difference between LTC and LTV?
The denominator. Loan-to-cost divides by what you spend; loan-to-value divides by what the finished property is worth. On a project with a large spread between the two, the cost test almost always produces the smaller loan.
Does the renovation holdback count as loan amount?
Yes. Lenders quote the full commitment — the amount funded at closing plus the renovation funds released in draws — and both caps are measured against the full commitment, not the day-one advance.
Can I count sweat equity or a below-market purchase as equity?
Usually not for the cost test, which is why it exists; cost is what you paid and will pay, in cash. A below-market purchase does help the value test, and some lenders will size the value leg on the appraisal rather than the price after a seasoning period.
Why did my lender’s cost figure differ from mine?
Lenders reclassify: developer fees and some soft costs come out, contingencies and interest reserves go in, and land is often carried at cost rather than value. A lower cost basis produces a smaller loan under the same cap, so agree the sources-and-uses early.
Is YieldStack a lender?
No. YieldStack is a commercial mortgage brokerage, not a lender. Every term sheet comes from a lender in the network and is subject to that lender's underwriting.
Does it cost anything to see terms?
No. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Is financing guaranteed?
No. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
Where does YieldStack operate?
Nationwide. YieldStack arranges commercial real estate financing nationwide. Every deal is business-purpose commercial financing, and the broker fee is paid only at closing.
You have the number.Now get the quotes.
YieldStack is a commercial mortgage brokerage, not a lender.