Cost to complete
What is cost to complete on a development loan?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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Cost to complete is the money still needed to finish a development — construction, fees, contingency and interest — as the lender's quantity surveyor estimates it at each stage. The test at every drawdown is that the undrawn loan plus any unspent equity still covers it; when it does not, the project is out of balance, and the developer must put in the difference before the bank releases anything more. It is the number that turns a building programme into a solvency test, month by month.
BASIS Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.
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