Development Finance Calculator

Do you need to figure out whether or not a potential project is commercially viable? Then use our property development finance calculator which will help you to see the actual costs at a glance.

Most property developers will tell you that securing a suitable funding package is one of the most critical elements when determining the profitability of any development project. Doing your homework, where the financial aspects are concerned, is vital and can be the difference between failure and success.

Start by entering the relevant details into our development finance calculator. You can then tweak certain variables, such as the loan term, rate of interest and the exit fees, in order to see how the outcome is affected when choosing one product over another. For example, if one product has a lower borrowing rate with higher exit fees, and the reverse is true of another development loan, there will obviously be a crossover point where one product will be more affordable than the other, depending on the amount borrowed and the loan duration, among other factors.

Although our online development finance calculator is an excellent reference tool that is designed to provide highly accurate results, it should still only be used as a guide. By talking to one of our trained advisors, you will be able to get a much better deal based on your individual needs and borrowing criteria.

Lenders have different rates depending on the specific type of development, the level of investment that you intend to provide yourself and the location of a project. Development finance is complicated at the best of times, which makes it imperative that you get as much expert help and advice as possible when applying for a loan.

When using our development loan calculator, you will need to provide the following information before the results are generated:

Loan Amount – The total net loan amount is the overall amount you want to borrow. It includes any funding required on the first day and any additional finance that will be required throughout the subsequent stages of development. There is no need to include the borrowing fees or interest charges as these will be calculated automatically.

Loan Term – This is the total length of the loan term, expressed in months.

Land Cost / Residual Value – If you already own the land, then you need to enter the Residual Value. Alternatively, you will need to enter the Land Cost in order to establish if it would be more profitable selling the development site as opposed to building on it yourself.

Stamp Duty – This is the amount of stamp duty you are expecting to pay when purchasing a development site.

Amount Available from Customer – This is the amount of funds you are willing to invest into the  development project from your own pocket.

Build Cost – The total projected costs for the development, excluding Stamp Duty, Land Costs or Facility charges.

Gross Development Value – The GDV amount is the gross value of a project on the completion date – or at the expected stage of development where you intend to sell a project on once certain works are finished.

Prime Funding (Initial Release) – This is the amount of finance you require at the first stage of the development (i.e. On day one).

Calculate Interest by Year or Month – Most interest charges are worked out on an annual basis, but you can change this to monthly when using the calculator.

Interest Rate – Although on our calculator this is set to a predefined % by default, you can change the rate of interest to match the product you are applying for, or wish to compare.

Releases – You will need to calculate how much funding you require and on which dates. With development finance, you only pay interest on funds that have actually been released. By altering the amounts and the release times of the various stages of funding, you can easily see how the interest charges will be affected and how profitable the project will be.

Property Development Finance – Borrowing Fees

When using our property finance calculator, various costs and borrowing fees will be worked out automatically. However, with so many lenders offering so many different products, the fees can vary significantlu from one loan to the next.

The facility fee is the main cost of borrowing that a lender will charge for granting you access to a specific product. This is typically worked out as a percentage of the total amount borrowed, or the GDV (Gross Development Value).

Other fees include valuation costs, legal costs and surveyor fees. To keep things simple, the calculator will provide a quick estimation of these charges.

An important factor to consider when applying for development finance and this is the Exit Fee. This is the amount you will be charged when settling the debt in full. Again, this is worked out as a percentage of the total gross loan amount or the GDV and it is set to 1% by default.

Other Costs and VAT Claim Back

If there are any other costs involved with a project then you need to enter them in this section. These are any costs that are not included in the Total Build Costs.

If you are entitled to claim any VAT back then you can enter this amount in the VAT Claim Back section. VAT refunds will reduce the total cost of a project and, subsequently, increase your profits.

Property Development Finance Calculator – Results

Once you have submitted the requested information, the calculator will return a list of results.

These are broken down into the following:

Monthly Interest – this displays the gross loan amount on a month by month basis, taking into consideration the facility fee with the total amount of funds released plus the actual interest charges at the end of each month.

Net Loan Amount – the overall loan amount requested, along with the funds released on day one, and any subsequent funding you expect to be released.

Facility Fee

Interest Charges – the total amount of interest you will be charged.

Gross Loan Amount – the net value of the loan along with the facility fee and associated interest charges.

Exit Fee

Redemption Loan Amount – the amount required to settle the loan (gross loan amount + the exit charges)

Valuation Costs – a quick estimation

Quantity Surveyor Fees – approximated

Legal Costs of Borrowing – approximated

Other Costs – any other costs added to the total build costs, as entered by the applicant.