Loan to Cost (LTC) Ratio Calculator
Loan-to-Cost (LTC) is the ratio of the loan amount to the total project cost and is commonly used by lenders and developers to assess financing risk during acquisition, construction, or renovation projects.
This calculator supports two workflow modes: enter a single verified total project cost, or provide an itemized cost breakdown that the tool will sum to derive the total. Use the method that best matches your underwriting documents.
Calculate LTC using a single total project cost value.
Inputs
Advanced inputs
Itemized cost breakdown
Total project cost input
Results
Loan-to-Cost (LTC) (%)
50.00%
Total project cost (entered)
$2,000,000.00
| Output | Value | Unit |
|---|---|---|
| Loan-to-Cost (LTC) (%) | 50.00% | % |
| Total project cost (entered) | $2,000,000.00 | USD |
Visualization
Methodology
LTC is computed as loan_amount divided by total_project_cost. Total project cost may be entered directly or derived by summing cost line items.
When using itemized inputs, the calculator sums purchase, construction, renovation, soft costs, contingency, and other costs to form the project total before computing LTC.
Values must be provided in the same currency and reflect lender-accepted bases (hard and soft costs as defined in your loan documents). Results are displayed as a percentage and rounded for presentation.
Worked examples
Example 1: Loan amount $1,000,000; total project cost $2,500,000 → LTC = 1,000,000 / 2,500,000 = 40%.
Example 2: Loan amount $4,000,000; itemized costs sum to $5,000,000 → LTC = 4,000,000 / 5,000,000 = 80%.
Further resources
Expert Q&A
What does LTC tell a lender?
LTC indicates the portion of project cost financed by debt. Higher LTC means greater lender exposure and may require additional equity, guarantees, or higher interest rates.
How is LTC different from Loan-to-Value (LTV)?
LTC compares loan to project cost, while LTV compares loan to the appraised value of the collateral. Both metrics are used together in underwriting but measure different risk vectors.
What if total project cost is zero or missing?
Division by zero is invalid. The calculator will not produce an LTC result if total project cost is zero or omitted. Ensure the total project cost is entered or itemized inputs sum to a positive number.
Are contingency and soft costs included?
Yes. When using the itemized mode, include contingency and soft costs if they are part of the lender-approved project budget. Exclude costs not accepted by your lender.
How precise are results?
Displayed results are rounded for clarity. Precision depends on input accuracy. For legal or regulatory filings, preserve full precision from source calculations and verify against lender documentation.
Sources & citations
- NIST - Engineering Statistics Handbook — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- IEEE Standards Association — https://standards.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov