Does the project stack up?
Before a lender, a valuer or a quantity surveyor looks at a project, a developer needs a first answer to one question: what margin is left after every cost, including the cost of the money. This is a quick residual feasibility, built the way a lender reads one.
No rates are quoted on this site. Where a rate is needed, you enter the one you have been offered. Nothing here is recorded or sent to us.
At a glance
- You enter
- Gross realisation, land price, construction cost, the percentages you expect for acquisition, contingency, fees and selling, GST treatment, and your finance terms
- You see
- Total development cost, profit, margin on cost and on GRV, equity required, and the residual land value at your target margin
- Assumed
- Debt drawn at 55% of peak on average over the term, GST on the margin scheme by default
The method, in the order a lender uses it.
Every figure above comes from these steps and nothing else. If a lender's number differs from ours, one of the items in the second list is usually the reason.
Total development cost
Land, acquisition, construction, contingency, fees and authority costs, plus finance (interest on the average drawn debt for the term, plus establishment), selling costs and GST.
GST
Margin scheme: one eleventh of GRV less land price. Full: one eleventh of GRV. Input tax credits on construction are ignored, which is conservative.
Margin
Profit divided by total development cost, and profit divided by GRV. Lenders commonly look for a margin on cost of 15% to 25% depending on the project and presales.
Residual land value
The land price at which the project would earn your target margin on cost, holding every other input constant. It is the most a developer can pay for the site.
What this tool does not include
- Presales, staging and settlement timing, which drive the real drawdown curve and interest bill.
- Land tax and holding costs during planning, cost escalation and rate movements during the build.
- Income tax on the profit, and the GST input credits on construction.
- Valuer and quantity surveyor adjustments, which is where lenders start.
Asked before the calculator, and after it.
What margin do development lenders look for?
Most senior lenders look for a margin on total development cost of around 15% to 25%, higher for riskier projects or where presales are light. Private funders will consider thinner margins at a higher price for the money. The exact hurdle is a lender decision, not a rule. Total development cost, in the glossary.
What is residual land value?
The maximum a developer can pay for a site and still make the target margin. Everything else in the feasibility is held constant and the land price is solved backwards.
Why is interest calculated on 55% of the debt?
Development debt is drawn progressively: land at settlement, then construction in stages. Averaging the drawn balance at about 55% of the peak is a common shortcut for a quick feasibility. Replace it with a cash flow before you go to a lender.
Does this replace a feasibility from a quantity surveyor or valuer?
No. It orders the numbers the way a lender will, so you can see whether a project deserves the cost of the professional work. Lenders rely on their own QS and valuer.
Same discipline, different question.
Each shows its method and its assumptions. None quotes a rate. All six tools.
How much could I borrow?
A lender does not start from the price of the house.
Open Loan repaymentsWhat will the repayments be?
Principal and interest, interest-only for a period, weekly or monthly, with or without extra repayments.
Open Refinance savingsIs switching worth it?
A lower rate is not automatically a saving.
Open Stamp dutyWhat will the government charge?
Transfer duty is the largest cost of buying after the price itself and it differs by state, by purpose and by whether it is your first home.
Open Fixed rate endingWhat happens when my fixed rate ends?
When a fixed term ends the loan reverts to the lender's variable rate, and the repayment moves on the day.
OpenLonger reads from the archive.
When the number raises a question, ask it.
A finance review starts with a conversation and a written position from Dayan Kasturiratna, who provides the credit assistance on every file. No credit check to start.
Calculators on this page provide estimates for general information only, from the figures you enter and the assumptions shown. They do not take account of your objectives, financial situation or needs, are not credit assistance, an offer or an approval, and should not be relied on without checking with your lender, conveyancer or adviser. Opulent Finance does not provide tax, legal or accounting advice.
