Realized 1031 Glossary of Terms

Loan-to-Cost Ratio (LTC)

Written by The Realized Team | Jul 18, 2022 12:00:00 PM

The loan to cost ratio is the ratio of the loan balance to the total cost of the project the loan is financing, expressed by the formula loan balance divided by total cost. For example, calculating a $6,000,000 loan against a $10,000,000 total project costs who result in a loan-to-cost ratio of 60% ($6,000,000 / $10,000,000). Note than the loan-to-cost ratio of a project may differ from its loan-to-value ratio.