Mortgage guide
What is the term of a mezzanine development finance loan?
The terms for mezzanine development finance typically range from 1 to 60 months, providing flexibility to suit various project timelines. Recognising that these loans are integral to property development, developers often aim to settle these financial agreements promptly, driven by the potential for profit.
- Published
- 13 Apr 2026
- Last reviewed
- 8 Oct 2026
- Reading time
- 2 min
What is the term of a mezzanine development finance loan?
The terms for mezzanine development finance typically range from 1 to 60 months, providing flexibility to suit various project timelines. Recognising that these loans are integral to property development, developers often aim to settle these financial agreements promptly, driven by the potential for profit.
In mezzanine development finance, lenders frequently set a minimum term ranging from 1 to 3 months. This condition means that once your development project is complete, you can exit the finance agreement shortly thereafter, often right after the minimum term ends. This aspect of mezzanine development finance offers developers a degree of flexibility, allowing them to align their exit strategy with the completion timeline of their project and financial objectives.
Development finance calculator
Mezzanine financing criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Borrowers | Personal, Ltd co, LLP, Trusts, Offshore Trusts |
| Term | Max 24 months |
| Max Applicants | 6 |
| Loan to Gross Development Value (LTGDV) | Max 75% |
| Loan to Cost (LTC) | Up to 95% |
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Frequently asked questions
What is mezzanine development finance?
Mezzanine development finance is a second-charge loan sitting behind the senior lender that takes total funding above the senior ceiling, commonly to 95% or 100% of cost. Mezzanine carries a higher rate and often a profit share, and is used to reduce the developer's equity requirement.
What is the typical loan term for development finance?
The loan term for development finance usually ranges from 6 to 24 months, depending on the scope and timeline of the project.
How does development finance work?
Development finance works in two stages: an initial advance towards the land or existing building, then staged drawdowns of build costs released against a monitoring surveyor's monthly certificates. Interest is rolled up or retained within the facility, and the loan is repaid when the completed units are sold or refinanced onto term mortgages.
Can I get 100% development finance?
100% development finance is available, for the right scheme, through a joint venture lender that provides the senior facility and the equity together, funding the whole scheme cost in exchange for a share of the profit. The developer's cash at risk can be nil, with the site or opportunity, the planning consent and the delivery forming the developer's contribution.
Who are development finance lenders?
Development finance lenders fall into five groups: high-street banks, lending at the lowest leverage and cost; challenger banks; specialist development lenders, funding to higher ceilings; mezzanine and joint venture funders, providing capital above senior debt; and private lenders and family offices, funding bespoke or time-critical schemes.
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