Construction Loan Calculator
Calculate construction loan interest during the build phase.
See monthly interest-only payments and total interest cost.
Construction Loan Costs
Construction loans work differently from regular mortgages. Funds are disbursed in draws as building progresses, and you pay interest only on the amount drawn.
Monthly Interest = Drawn Amount × (Annual Rate / 12)
How it works:
- Lender approves total loan amount
- Funds are released in stages (draws) as construction milestones are met
- You pay interest only on the amount drawn so far
- After construction, the loan converts to a permanent mortgage
Typical construction loan terms:
| Feature | Typical Value |
|---|---|
| Interest rate | 6–9% |
| Loan term (build phase) | 6–18 months |
| Down payment | 20–25% |
| Draw schedule | 4–6 draws |
Interest increases over time as more money is drawn. Early months have low payments; later months have higher payments.