Development finance profit-on-cost calculator

Development lenders assess schemes on margin, not just GDV. Profit-on-cost shows how much room there is if build costs overrun, sales slow or prices soften. A scheme can show strong GDV but fail if costs eat the margin.

This development finance calculator UK developers can use at appraisal stage models land, build, professional fees, facility interest and arrangement fees to produce profit-on-cost — with a gauge aligned to typical lender appetite at 20%+.

Lenders cap borrowing as a percentage of GDV and will not lend more than total development costs. The facility in this model is the lower of those two figures. Developer equity covers the remainder of total project cost after the facility — plus any shortfall if costs exceed the cap.

Interest is approximate: land drawn in full from day one, build averaged at 50% over the term. Confirm drawdown assumptions with your broker for exact quotes.

On £2m GDV, £600k land, £800k build, 10% professional costs, 18-month term at 1% monthly and 2% arrangement fee with 65% max LTGDV, facility is £1.3m, total project cost about £1.66m and profit roughly £345k — profit-on-cost about 21%, in the comfortable band.

Reduce GDV or increase costs to stress the scheme, then request an exact facility from Tera's development lender panel.