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Development Finance Calculator

Our online development finance calculator will be designed to help you quickly and easily estimate how much you may expect to pay as a development finance loan client.

Start by putting the necessary information into our development funding calculator. You may then experiment with different loan terms, interest rates, and exit costs to observe how the outcome changes when you choose one product over another. For example, if one product has a lower borrowing rate but higher exit fees, and the opposite is true for another development loan, there will undoubtedly be a point at which one product is more affordable than the other, depending on the amount borrowed and loan duration, among other factors.

Our online development finance calculator is an amazing reference tool that produces extremely accurate results; however, it should only be used as a guide. Talking to one of our professional advisers will help you receive a far better offer, depending on your specific needs and borrowing conditions.

Lenders charge varied rates based on the type of development, the amount of investment you expect to make yourself, and the location of the project. Development finance is difficult at the best of times; therefore, it is critical that you get as much expert assistance and guidance as possible when applying for a loan.

When using our development loan calculator, you must submit the following information before the results are created:

  • Loan amount: The total net loan amount is the total amount you intend to borrow. This covers any capital necessary on the first day, as well as any further finance required during the development stages that follow. There is no need to include borrowing fees or interest costs because they will be computed automatically.
  • Loan term: This is the overall period of the loan, measured in months.
  • Land cost/residual value: If you already own the land, enter its residual value. Alternatively, you may enter the land cost to see if it is more advantageous to sell the development site rather than construct it yourself.
  • Stamp duty: The amount of stamp duty you expect to pay when buying a development site.
  • Amount available from the customer: This is the amount of money you are ready to contribute to the development project from your own pocket.
  • Build cost: The overall estimated cost of the development, excluding stamp duty, land prices, and facility charges.
  • Gross development value (GDV): GDV is the gross worth of a project at its completion date. Or at the predicted stage of development, when you aim to sell a project once specific tasks are completed.
  • Prime financing (first release): This is the amount of funds required at the start of the development process.
  • Calculate interest by year or month: Most interest costs are calculated annually, but the calculator allows you to modify this to monthly.
  • Interest rate: Although our calculator defaults to a fixed percentage, you may adjust the interest rate to fit the product you're applying for or comparing.
  • Releases: Determine how much funding you will need and when. Development financing only charges interest on monies that have been disbursed. By adjusting the quantities and release periods of the various financing stages, you can quickly understand how interest costs will be influenced and how lucrative the project will be.

Borrowing fees for property development finance

Using our home financing calculator, numerous charges and borrowing fees will be calculated automatically. However, with so many lenders providing so many products, costs can vary greatly from one loan to the next.

The facility fee is the primary cost of borrowing that a lender will charge you for gaining access to a certain product. This is often calculated as a percentage of the entire amount borrowed, or GDV (gross development value).

Other expenses include appraisal, legal, and surveyor fees. To keep things easy, the calculator will quickly estimate these expenses.

Exit fees are a significant consideration when applying for development funding. This is the amount you will be charged if you settle your debt in full. Again, this is calculated as a percentage of the entire gross loan amount, or GDV, and is set at 1% by default.

Other expenses and VAT claimback

If there are any additional expenditures associated with a project, you must enter them in this box. These are any expenditures that are not included in the overall construction price. If you are eligible to claim any VAT back, enter the amount in the VAT Claim Back area. VAT refunds will lower the entire cost of a project, hence increasing your earnings.

Property development finance calculator: results

Once you've entered the needed information, the calculator will provide a list of results. These are separated into the following:

  • Monthly interest: This shows the gross loan amount month by month, taking into account the facility fee, the total amount of cash issued, and the real interest charges at the end of the month.
  • Net loan amount: The total loan amount sought, including monies issued on day one and any further funding expected to be provided.
  • Interest costs: The total interest you will be charged
  • Gross loan amount: The net value of the loan, including the facility fee and interest costs.
  • Redemption loan amount: The amount necessary to repay the debt (gross loan amount plus exit costs).
  • Fees for quantity surveyors: Approximated
  • Legal expenses of borrowing: Approximated
  • Other expenses: Any additional expenditures added to the overall build costs as specified by the applicant.

Types of Development Loans

When looking for property development finance it is important to identify the type of project being planned by the developer in order to access the correct funding product. Types of works can include:

ground up build development finance

Ground up builds

New builds nearly always require development finance loans. Once the project is completed, developers may use development exit finance as a more cost-effective solution, but this cannot be done before the project is watertight.

property conversion or restoration finance

Large scale restoration and property conversions

To accommodate this type of project refurbishment finance is typically the correct type of loan to use, however if the project is larger than the norm, development finance may be a better alternative.

property refurbishment finance

Property refurbishment

A refurbishment loan is a type of bridging finance generally used for property renovations. It can be used for various improvements including, installing a new roof, general structural changes, building an extension, refurbishment, and decoration.

bridging loan property development

Bridging loan for property development

Property investors or developers may want to buy property which needs development or completion work still doing and are unable to get funding from their bank. This is a typical scenario when a bridging loan is a suitable alternative.

How is Development Finance Repaid?

Development finance loans are typically paid in one of the following three ways:

Paid in full

The total loan amount is paid in full, using the profits, when the project is complete, and the properties have been sold.

refinance with long term loan

Refinancing using a long term loan

This usually happens when the developer wants to keep the development for either personal use or for rental purposes.

development exit finance

Refinancing using a Development Exit Bridging Finance

This type of short term loan is often used to fund a new development project before the current project is sold. It can also be used to give developers a bit of breathing space to complete minor works and find buyers.

Frequently Asked Questions

How is development finance calculated?

Unlike traditional house or company mortgages, development loans are disbursed in phases from an agreed-upon lending pool. Lenders will normally restrict the amount of money they are ready to lend to no more than 65% of the land acquisition price and up to 100% of the building cost.

Can you get 100% development finance?

100% development. Finance is usually only accessible to experienced property developers who have undertaken similar-sized projects in the past. If you're a new developer or trying to fund a smaller-scale project, obtaining this amount of financing may be difficult.

Who is eligible for development finance?

In the UK, eligibility for development finance typically depends on several factors, including but not limited to:

  • Type of development: Different finance options are available for various types of development projects, such as residential, commercial, industrial, or mixed-use developments.
  • Experience and track record: Lenders often look for developers with a proven track record of successful projects. However, there may be options available for new developers or those with limited experience.
  • Financial stability: Developers are generally required to demonstrate their financial stability and ability to repay the loan. This may include providing details of assets, liabilities, income, and expenses.
  • Feasibility of the project: Lenders assess the viability and feasibility of the development project, including market demand, projected costs, potential returns, and associated risks.
  • Creditworthiness: Personal and/or corporate credit history may also be considered during the eligibility assessment.
  • Legal and regulatory compliance: Developers must comply with all relevant legal and regulatory requirements, including planning permissions, building regulations, environmental standards, and health and safety regulations.
  • Loan-to-value ratio: Lenders typically evaluate the loan-to-value ratio, which is the ratio of the loan amount to the appraised value of the property or project. Lower loan-to-value ratios may improve eligibility and terms.
  • Exit strategy: Lenders may require a clear exit strategy outlining how the loan will be repaid, such as through property sales, refinancing, or other means.

Development Finance Products

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