Calculator
Development feasibility calculator
Quick answer
A development feasibility calculation sizes a project against three numbers: total development cost (TDC, land plus construction plus soft costs), loan to cost (LVC, the loan against TDC), and loan to value against gross realisation value (LVR against GRV, the exit-side check), with profit on cost a headline margin metric. The calculator below models any project's numbers.
Inputs
Feasibility snapshot
$2,600,000 profit
On $7,900,000 TDC vs $10,500,000 GRV.
Total development cost (TDC)
$7,900,000
Profit on cost (POC)
32.9%
Profit / TDC
Profit on GRV
24.8%
Profit / GRV
Loan to cost (LVC)
69.6%
Loan / TDC
Loan to value (LVR)
52.4%
Loan / GRV
Equity required
$2,400,000
TDC minus loan
Assumptions
- TDC is land cost plus construction cost plus soft costs, as entered.
- Profit is GRV minus TDC, before finance costs and tax.
- LVC is the loan divided by TDC; LVR is the loan divided by GRV.
Illustrative estimate only, based on the inputs and assumptions shown. This is not a quote, credit approval or commitment to lend. Actual interest, fees, repayments and terms may differ. Costs not included are listed below.
Costs not included
- Interest and finance costs
- Tax, GST and selling costs beyond what you include in soft costs
- Lender fees, including establishment and any other fees
- Valuation, legal and settlement costs
- Government charges and registration fees
- Default interest, default fees and enforcement costs
What credit looks at on a development file
Three numbers do most of the work. POC tells credit whether the margin survives a cost over-run. LVC is the entry-side check. LVR against GRV is the exit-side check. A strong file clears all three; a marginal file clears one and fails one. The credit team underwrites every file in full; this calculator is a pre-submission sanity check.
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