Development Finance Calculator
Below you will find our custom built UK Development Finance Calculator. Feel free to play around with the numbers on there, we have pre-loaded some key lenders rates into the slider, so if you like the look of some of the numbers, please submit an enquiry with the form on the right of this paragraph.
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The numbers supplied by the calculator do not take into account additional lender fees outside of the lenders arrangement fee. The calculator also cant supply you with costs for legal, valuation or broker fees, so please bare this in mind when looking at the numbers.
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As always, it is best to work with a broker to find out the full information, so please submit an enquiry and we will be in touch to help!
The UK's Best Development Loan Calculator
Total Interest
Gross/Total
Lender Fee (2%)
LTV% Day 1
LTGDV %
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Development Finance Rate Guide
Development Finance is usually a slight bit more expensive than bridging finance. The difference between the two is usually down to either the cost or level of works, but other than that they are essentially the same. Both forms of finance are short term, however bridging is usually less 'heavy'. Development finance is a little tricky to provide a guide with as often lenders compete for business. This means in practice a lender may quote one rate to a broker or client, then the broker may be offered better elsewhere, so in order to not lose the deal, the original lender may lower their rate or remove some fees. A good broker will negotiate these rates for you from the outset and will only present a lenders final numbers after all negotiations.
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Lenders in this space will also often offer bespoke rates and products as every development is slightly different and therefore the risk for the lender differs from one deal to the next. For a 'vanilla' development, a lender may offer as low as 0.8% per month, whereas for a much larger and more complex development, a development finance lender may go as high as 1.5% per month.
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For inputs into the calculator above, please assume most developments fall within the 0.9%-1.2% range per month, as anything outside of this would be considered an outlier.
Development Finance Calculator Tips
It can be a little difficult if you are a first time developer to use the development finance calculator so hopefully some tips will help you along. If you remember that there are 2 key values you need to input, the day 1 value and the value at the end of the build (GDV - Gross Development Value).
A development finance loan has 2 parts, a day 1 loan, purely borrowed against the value of the site on day 1, and a works loan. A development finance lender will look to fully fund all of the works in a development, so whatever the cost of works is should be input fully, you cannot part borrow for works and part fund yourself. A lender does this to ensure that if something happened to the developer or they were for some reason unable to finish the build, the lender would know that the money is allocated to the build already and they could finish themselves.
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This point above also leads in to why there are 2 surveys with development finance, an initial appraisal of the land value and a second survey by a monitoring surveyor or quantity surveyor to find out the cost of works. The lender has to listen to the surveyors point of view on the cost of works for each development so there is often a slight back and forth between the developer and the lender on this point as it will often cost a lender more to develop a project than it would a developer who is in the trade and has connections.
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When inputting figures into the development finance calculator, please stick around the following rules;
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Around 60% borrowing maximum on day 1 if the property is land or the works are very heavy.
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A conservative day 1 value
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The FULL cost of works including a decent size contingency (10%+) ON TOP (not built in to each element on the schedule of works)
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A conservative GDV value
Development Finance FAQs
When do I use development finance?
Development Finance is generally used when building a property from the ground up or completely re-constructing a property or structure which is already there.
How long does development finance take to set up?
Development Finance can take anywhere between 2 months and a year to put in to place. Development finance is generally a slower form of finance to set up but this process can be sped up a lot if you want to, you just have to spin some plates to do so.
How long can I get development finance for?
Most lenders will offer terms up to 36 months, but with the structure of development finance this is not always best for you. With development finance usually being taken on a rolled or retained basis, the longer you set the loan up for, the more retained interest the lender will take from your day 1 loan.