Development Loan Assessment Calculator
Size a development facility the way a financier does: maximum loan against end market value, settlement costs and interest estimated up front, and a clear surplus-or-shortfall answer — plus the maximum land release at settlement.
How the assessment works
Maximum loan = estimated end market value × LVR (default 70%), rounded up to the nearest $100. Lenders also cap facilities at roughly 80% of total development cost — the lower figure applies, confirmed by valuation.
Total costs add construction (incl. GST), a 5% contingency, establishment and legal costs (application fee on the facility plus a flat allowance), and interest estimated at 60% average utilisation of the facility over the term.
Surplus or shortfall = maximum loan − (total costs + debt being refinanced). A shortfall is the equity, mezzanine or preferred-equity gap the deal still needs. Max land release is the lesser of ~65% of the as-is site value and the facility headroom after costs.
Development loan FAQs
How is a development loan sized?
A development loan is typically sized against the end market value of the completed project — commonly up to 65–70% LVR — with a second cap of around 80% of total development cost. The lower of the two usually sets the facility. The maximum loan then has to cover construction, contingency, establishment costs, interest and any existing debt being refinanced.
What does surplus or shortfall mean in a loan assessment?
The surplus or shortfall is the maximum loan amount minus the total funds the project requires (settlement costs plus debt being refinanced). A surplus means the facility covers the project with headroom; a shortfall means equity, a second mortgage, mezzanine or preferred equity is needed to close the gap.
What is a land release at settlement?
A land release is the portion of the facility a lender will advance against the site itself at settlement, before construction begins — commonly capped at around 65% of the as-is site value or the facility headroom after costs, whichever is lower. It is what refinances your existing land debt and returns early equity.
Why does the interest estimate use 60% utilisation?
Because a construction facility draws down progressively rather than being fully drawn from day one, interest is estimated on an average utilisation — this tool assumes 60% of the facility over the term, which is a standard first-pass convention. The precise figure comes from your drawdown schedule.
Is this an offer of finance?
No. It reproduces the first-pass assessment we run when a developer brings us a deal, using indicative assumptions you can adjust. Actual facility size, pricing and conditions depend on lender assessment, valuation and quantity surveyor reporting where applicable.
This calculator is general information only, not financial or credit advice, and not an offer of finance. All figures — including the default interest rate — are indicative and subject to lender assessment. All lending is for business or investment purposes.
Want the real number, not the indicative one?
Send us the site, the costs and the end value — we'll come back with what our panel would actually lend.