LTC vs LTV vs GDV vs LTGDV: Developer Metrics Explained
Four acronyms decide how much a lender will advance against a development scheme: LTV, LTC, GDV and LTGDV. They sound interchangeable and are constantly confused — but they measure different things, and on any given deal one of them quietly sets the ceiling on your loan.
This guide defines each ratio in plain English, shows how they relate, and walks through a worked example so you can see exactly which one becomes the binding constraint on a typical development.
The Four Metrics at a Glance
| Metric | Full name | What it measures | Typical limit |
|---|---|---|---|
| LTV | Loan to Value | Loan as a % of a property's current market value | Up to ~75% |
| LTC | Loan to Cost | Loan as a % of total project cost (land + build + fees) | 70%–75% |
| GDV | Gross Development Value | The projected finished value of the completed scheme | — (a value, not a ratio) |
| LTGDV | Loan to GDV | Loan as a % of the completed (finished) value | 60%–65% |
The first thing to notice: GDV is not a ratio at all. It's a number — the estimated open-market value of the scheme once it's built and sold. LTGDV is the ratio that uses it. The other three express your loan as a percentage of something.
LTV — Loan to Value
LTV is the ratio you'll know from ordinary mortgages: the loan divided by the property's current value.
LTV = loan ÷ current property value
For a straightforward purchase or a bridging refinance, LTV is the metric that matters — there's a property with a value today, and the lender advances a percentage of it. For ground-up development, LTV on its own is less useful, because at the start there may be little more than a plot of land. That's where LTC and LTGDV take over. For a deeper look at LTV and LTC side by side, see LTV vs LTC Explained.
LTC — Loan to Cost
LTC measures the loan against the total cost of delivering the scheme — not its value.
LTC = loan ÷ (land cost + construction cost + fees)
Total project cost includes the land purchase, the full build budget, professional fees, and finance costs. If your all-in cost is £1m and the lender offers 70% LTC, the maximum facility on that basis is £700,000 — and you fund the remaining £300,000 as equity.
LTC is the primary metric for development and heavy refurbishment because it ties the loan to what the project actually costs to build, which is what the lender is really funding. Most senior development lenders cap LTC around 70%–75%.
GDV — Gross Development Value
GDV is the estimated market value of the completed development — what the finished units are worth once built and ready to sell or let.
A development appraisal (usually by a RICS valuer) sets the GDV, and it's the headline number the whole deal is sized against. A higher, well-evidenced GDV supports a larger loan; an optimistic GDV that the valuer won't stand behind shrinks it. For a full definition with worked examples, see the GDV glossary entry.
LTGDV — Loan to Gross Development Value
LTGDV expresses the loan as a percentage of that completed value.
LTGDV = loan ÷ GDV
Because GDV is the finished value (higher than today's value of a half-built site), LTGDV gives lenders a forward-looking view of how exposed they are at exit. Senior development lenders typically cap LTGDV around 60%–65%. It's the safety check that stops a scheme borrowing too much against an ambitious end value.
How the Ratios Interact — and Which One Binds
Here's the part that trips developers up: on a development, the lender runs both the LTC test and the LTGDV test, and the lower of the two figures wins. Whichever calculation produces the smaller maximum loan is the binding constraint — the other simply isn't reached.
That means a scheme with a very strong projected GDV can still be capped by LTC (the cost side), and a scheme with thin margins can be capped by LTGDV (the value side). You don't get to pick the more generous one.
Worked Example: Which Ratio Caps the Loan?
Consider a small residential scheme:
- Land + build + fees (total cost): £800,000
- GDV (projected finished value): £1,200,000
- Lender limits: 75% LTC and 65% LTGDV
Run both tests:
- 75% LTC = 0.75 × £800,000 = £600,000
- 65% LTGDV = 0.65 × £1,200,000 = £780,000
The lender takes the lower figure, so the maximum loan is £600,000 — LTC is the binding constraint here. The developer funds the remaining £200,000 of cost as equity.
Now imagine the build cost rises to £1,000,000 while GDV stays at £1,200,000:
- 75% LTC = 0.75 × £1,000,000 = £750,000
- 65% LTGDV = 0.65 × £1,200,000 = £780,000
This time LTC (£750,000) is still the lower figure and binds — but the gap has narrowed, and if costs rose much further the LTGDV ceiling would start to bite. As schemes get tighter (higher cost relative to end value), LTGDV is the ratio that tends to take over. Understanding which one is binding tells you whether you need to find more equity, sharpen the build budget, or strengthen the GDV evidence.
Frequently Asked Questions
What's the difference between LTC and LTV?
LTV measures the loan against a property's current market value; LTC measures it against the total cost to deliver the project (land + build + fees). For purchases, LTV is the key ratio. For ground-up development, LTC is the primary metric because at the outset there's no finished value to lend against — only cost.
Is GDV the same as LTGDV?
No. GDV (Gross Development Value) is a number — the estimated value of the finished scheme. LTGDV (Loan to GDV) is the ratio that divides your loan by that GDV. Lenders typically cap LTGDV at 60%–65%.
Which ratio decides how much I can borrow?
On a development, the lender runs both the LTC test and the LTGDV test and lends the lower of the two results. Whichever produces the smaller maximum is the binding constraint. Higher-cost schemes are often capped by LTGDV; schemes with strong end values are often capped by LTC.
How can I increase my maximum loan?
Depending on which ratio is binding: reduce or evidence your costs more tightly (helps if LTC binds), strengthen the GDV with firmer comparable sales evidence (helps if LTGDV binds), or access higher-leverage structures such as senior-plus-mezzanine through an experienced developer profile. A specialist broker can identify which lever actually moves your number.
Getting Your Numbers Right
Most development enquiries we see quote a single ratio when the deal is actually capped by another. Knowing which of LTC and LTGDV binds your scheme — before you approach a lender — tells you exactly how much equity you'll need and where to focus your appraisal.
We work with a wide panel of development lenders and run both tests on every deal to find the structure that maximises your facility. Get in touch with your land cost, build budget, and projected GDV, and we'll come back with indicative terms and a clear view of which ratio is setting your ceiling.
For the wider picture, start with the Development Finance Hub, or read How Development Finance Works and Development Finance Rates & Fees.