Lease-up break-even calculator
Iterate a lease-up month by month to find when income covers the monthly finance cost, when the scheme stabilises, and the interest carried until break-even.
While a completed scheme leases up, its income climbs month by month until it covers the finance cost and then reaches stabilised occupancy. This calculator runs that path. Enter the income at full occupancy, the starting occupancy, the speed at which occupancy is gained each month and the monthly finance cost, and it iterates month by month to find when income first covers the finance cost, when the scheme reaches stabilised occupancy, and how much interest is carried until break-even. It is the timing question stabilisation finance is sized around.
- Months to stabilised occupancy0
- Interest carried to break-even£0
- Occupancy at break-even0%
Indicative only. Not financial advice or an offer of finance.
How the month-by-month model works
The calculator steps through the lease-up one month at a time. In each month it raises occupancy by the lease-up speed, capped at 100 percent, then works out that month’s income as the full-occupancy income multiplied by the current occupancy.
- Break-even is the first month in which monthly income is at least the monthly finance cost.
- Months to stabilised occupancy is the first month occupancy reaches the stabilised target you set, often around 95 percent.
- Interest carried to break-even sums the monthly shortfall (finance cost less income) for every month before break-even. It is the cash, reserve or rolled-up interest needed to carry the scheme until it pays for itself.
This is why stabilisation finance is usually structured interest-only or with the interest rolled up: until the scheme crosses break-even, the income does not cover the finance cost, so the facility is termed and sized to carry that shortfall. A faster lease-up in a strong city reaches break-even sooner and carries less interest, which is one reason the operator and the local market matter so much. To turn stabilised occupancy into a value and a term exit, use the stabilisation gap calculator, and see our stabilisation finance page.
Lease-up break-even: common questions
What is lease-up break-even?
Lease-up break-even is the point during letting at which the income the scheme produces first covers its monthly finance cost. Below break-even the asset does not earn enough to service its interest, so the shortfall is funded from reserves or rolled into the loan. Once occupancy crosses break-even, the scheme carries itself.
How long does an asset take to lease up?
It varies by asset class. A build-to-rent or residential block typically leases up over roughly 6 to 18 months, a new hotel ramps trading over 18 to 36 months, and a self-storage store can take three to five years to reach mature occupancy. The actual pace depends on the asset class, the location, the operator and the local demand, which is why the calculator lets you set the lease-up speed yourself.
How is the interest carried during lease-up funded?
Until the scheme reaches break-even, the income does not cover the finance cost, so the shortfall is funded from an interest reserve, from the borrower's cash, or by rolling the interest into the loan. Stabilisation finance is usually structured interest-only or rolled up for this reason, so the rising income is not all consumed by debt service while the scheme fills.
What occupancy counts as stabilised?
Lenders generally treat a scheme as stabilised once it reaches a mature, sustainable occupancy, often around 95 percent or higher, with a proven rent roll. The exact threshold varies by lender, city and operator. Reaching stabilised occupancy is what lets the scheme refinance onto a long-term investment term loan at keener pricing.
Related calculators and finance
Modelling a lease-up?
Send us the scheme and the operator’s lettings plan and we will size the stabilisation facility to carry it through.