Release price
What is a release price on a development loan?
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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED
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A release price is the minimum amount from each unit's sale that must go to the development lender before it releases its mortgage over that unit. It is set so that the loan is repaid faster than the security is sold — usually well before the last unit settles — and a developer who wants to sell some units below their feasibility price needs the lender's agreement if the net proceeds would fall below it. It is how the sales repay the loan in step with the bank giving up its security.
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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