Mortgage guide

Over budget build costs

Read how mezzanine finance may be considered alongside a senior loan when development costs rise, including how Loan to Cost (LTC) affects the funding structure.

Over budget build costs

We understand that even the best-planned developments can face unexpected cost overruns. When a project runs over budget and your primary lender is unwilling to extend further funds, mezzanine finance can be an effective and strategic solution. Rather than refinancing the entire facility, mezzanine funding allows you to access additional capital to bridge the gap and keep your project on track. One of the key advantages of mezzanine financing is the ability to increase your total borrowing capacity without disrupting your existing loan structure. With Loan to Gross Development Value (LTGDV) available up to 80%, mezzanine loans can raise the total available finance to as much as 80% of your project’s completed market value. This is ideal for developers who have already made significant progress and now need extra funding to cross the finish line.

In many cases, we can also structure mezzanine finance up to 95% Loan to Cost (LTC). This means that between the senior loan and the mezzanine facility, up to 95% of your total development costs can be funded, a crucial safety net for developers who have encountered rising material costs, labour delays, or unforeseen structural works.

Specialist mezzanine finance providers who understand the urgency and complexity of over-budget construction finance. Our panel of lenders is prepared to work alongside your existing senior lender, taking a second charge position without requiring you to refinance the entire project. If you’re facing budget pressures and your current lender has capped their exposure, mezzanine development finance offers a flexible, non-disruptive route to completion. With access to exclusive, broker-only products and a deep understanding of the funding landscape, Mortgage Lane is here to help you secure the support you need and avoid costly project delays.

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