Three percentages can describe the same project from different angles. Keep the loan amount, cost basis and valuation basis clear before comparing finance proposals.
Puppet Jack illustration; the examples below are invented.
The starting point
LTV compares borrowing with a stated property value. LTC compares it with a defined project-cost total. LTGDV compares it with the projected completed development value. None of these ratios, on its own, tells you the cash available on day one.
Original arithmetic illustrations for preparation. No lender threshold, rate or maximum facility is promised. A lender’s definitions, valuation and treatment of fees, interest and costs govern its own assessment.
Use the right denominator
Lenders publish development finance terms using both loan-to-cost and loan-to-gross-development-value measures. A percentage is only comparable when the underlying definitions match. Ask whether the stated loan includes retained interest or fees and which costs or values the lender uses.
For these explanations, divide the stated loan figure by the stated comparison amount, then multiply by 100. This arithmetic describes the supplied numbers. It does not substitute for a lender’s facility calculation.
LTV: stated loan ÷ stated property value × 100. Identify whether that is a current, day-one or other valuation.
LTC: stated loan ÷ defined project costs × 100. Establish which cost categories are included.
LTGDV: stated loan ÷ projected completed value × 100. The projected value is not a guaranteed sale receipt.
The facility ceiling is different from the first advance
A development facility can release money in stages. The overall amount therefore needs to be read alongside the initial advance, your equity contribution, the drawdown conditions and any money retained for interest or charges.
Shawbrook’s published development process includes valuation, monitoring-surveyor reporting and legal due diligence. Other products have their own requirements. Ask for the specific conditions and cost treatment rather than importing another lender’s headline ratios into your project.
What is available at the land purchase or first completion?
When must your own cash or equity be contributed?
Which evidence or inspection is needed for later drawdowns?
How are interest, fees, contingency and cost overruns funded?
Change the costs and value separately
A higher cost total changes LTC even if the loan stays the same. A lower completed value changes LTGDV. It is useful to test both because a ratio can move in a direction that looks reassuring while the project actually needs more cash.
Keep a dated appraisal, cost schedule and programme. If assumptions change, update the cash needed and the repayment plan as well as the percentages. An unused headroom figure is not an agreement that the lender will advance more money.
See the difference in practice
Two situations to think through.
These are original, invented examples for discussion. They are not records of clients, approvals, lender offers or completed transactions.
Illustrative situation
One project, two different percentages
An invented project has a stated £1.2 million facility, £1.6 million of defined project costs and a projected completed value of £2 million.
Loan to defined cost
75%
Loan to projected GDV
60%
Defined costs less facility
£400,000
Questions to work through
On those assumptions, LTC is £1.2m ÷ £1.6m = 75%. LTGDV is £1.2m ÷ £2m = 60%. The defined costs exceed the facility by £400,000. That difference is not necessarily the required day-one deposit, because drawdowns, cost definitions, fees and existing equity still need to be understood.
The same facility can have two correct ratios. Neither establishes eligibility or the day-one net advance.
Illustrative situation
Costs rise while the projected value falls
Keep the same £1.2 million facility, but increase defined costs to £1.8 million and reduce projected GDV to £1.9 million.
Revised LTC
66.7%
Revised LTGDV
63.2%
Defined costs less facility
£600,000
Questions to work through
LTC becomes about 66.7%, while LTGDV becomes about 63.2%. The costs above the facility increase to £600,000. The lower LTC does not mean the project became easier to fund: the assumed funding gap grew by £200,000.
Read the cash gap and exit assumptions alongside the ratios. No further advance or final sale value is assumed.
Your next conversation
Bring the outline. Build the detail together.
You can get in touch before every item is ready. Your selections stay on this page and are not submitted.
Can I compare two quoted LTC percentages directly?
Only after checking that the loan and cost definitions match. Interest, fees, land value and other items can affect what a particular proposal includes.
Does a lower LTC always mean a smaller cash requirement?
No. If costs rise and the facility stays fixed, the LTC falls while the difference you need to fund increases. The second worked example shows this.
Is GDV the same as a guaranteed sale price?
No. It is a projected completed value used in the appraisal or valuation. Actual sales, timing and costs can differ.
Sources and scope.
Primary sources checked on 31 October 2026. The preparation prompts and worked examples are editorial explanations; follow the originals for their full scope and updates.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or other loans secured upon it.
Some buy-to-let, bridging, commercial and development finance is not regulated by the FCA. The applicable protections depend on the transaction. Confirm the service scope and terms before proceeding.
