# loan-to-cost

Location

US

TAGS

finance

OTHER names

## LTC

The loan-to-cost (LTC) ratio is a metric used in commercial real estate construction to compare the financing of a project (as offered by a loan) with the cost of building the project. The LTC ratio allows commercial real estate lenders to determine the risk of offering a construction loan. It also allows developers to understand the amount of equity they retain during a construction project. Similar to the LTC ratio, the loan-to-value (LTV) ratio also compares the construction loan amount but with the fair-market value of the project after completion.

Source: [Investopedia](https://www.investopedia.com/terms/l/loan-to-cost-ratio-ltc.asp)