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Construction loan calculator

Estimate a construction-to-permanent loan in two phases. During the build you pay interest only on the funds drawn, so the calculator applies your rate to the average outstanding balance (which depends on the draw schedule). It then amortises the permanent mortgage that replaces the construction loan.

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The Construction loan calculator turns Total project cost, Down payment / equity, Construction rate (APR), Construction period (months), Draw schedule, Permanent mortgage rate (APR), Permanent term (years) into Construction loan amount, Average outstanding balance, Interest during construction, Permanent monthly payment, Total interest (permanent), instantly and for free. For instance, with Total project cost = $400,000.00, Down payment / equity = $80,000.00, Construction rate (APR) = 8%, Construction period (months) = 12, Draw schedule = Even draws (~50% avg balance), Permanent mortgage rate (APR) = 6.5% and Permanent term (years) = 30 it returns Construction loan amount = $320,000.00, Average outstanding balance = $160,000.00 and Interest during construction = $12,800.00.

How to use it

  1. Enter your values: Total project cost, Down payment / equity, Construction rate (APR), Construction period (months), Draw schedule, Permanent mortgage rate (APR), Permanent term (years).
  2. Read the result instantly: Construction loan amount, Average outstanding balance, Interest during construction, Permanent monthly payment, Total interest (permanent).

Frequently asked questions

What does the Construction loan calculator actually compute?

It takes Total project cost, Down payment / equity, Construction rate (APR), Construction period (months), Draw schedule, Permanent mortgage rate (APR) and Permanent term (years) and derives Construction loan amount, Average outstanding balance, Interest during construction, Permanent monthly payment and Total interest (permanent) from them. The calculation is live as you type, so the result updates on every change.

What information do I need to provide?

7 values: Total project cost ($), Down payment / equity ($), Construction rate (APR) (%), Construction period (months), Draw schedule, Permanent mortgage rate (APR) (%) and Permanent term (years). Nothing else is required — no account, no file upload.

Can you show a worked example?

With Total project cost = $400,000.00, Down payment / equity = $80,000.00, Construction rate (APR) = 8%, Construction period (months) = 12, Draw schedule = Even draws (~50% avg balance), Permanent mortgage rate (APR) = 6.5% and Permanent term (years) = 30, the calculator returns Construction loan amount = $320,000.00, Average outstanding balance = $160,000.00 and Interest during construction = $12,800.00. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

What happens if I enter larger values?

It moves a lot. Using Total project cost = $800,000.00, Down payment / equity = $160,000.00, Construction rate (APR) = 8.8%, Construction period (months) = 24, Draw schedule = Front-loaded (~75% avg), Permanent mortgage rate (APR) = 7.2% and Permanent term (years) = 60 instead, Construction loan amount goes from $320,000.00 to $640,000.00 — which is why it is worth testing a few scenarios rather than trusting a single figure.

Which “Draw schedule” option should I choose?

You can pick between « Even draws (~50% avg balance) », « Front-loaded (~75% avg) » and « Back-loaded (~25% avg) ». Each one changes what the calculator works out, so switch and compare — the default is « Even draws (~50% avg balance) ».

Which units should I enter the values in?

Enter Construction rate (APR) % and Permanent mortgage rate (APR) %.

What does it give for smaller values?

Scaled down to Total project cost = $200,000.00, Down payment / equity = $40,000.00, Construction rate (APR) = 7.2%, Construction period (months) = 6, Draw schedule = Even draws (~50% avg balance), Permanent mortgage rate (APR) = 5.9% and Permanent term (years) = 15, Construction loan amount comes out at $160,000.00. The relationship is worth checking at both ends before you rely on a single result.

When would I actually use this?

Before making an offer: what the bank will lend, what the purchase costs on top of the price, and how much deposit closes the gap.

What is the most common mistake?

Budgeting for the price and forgetting the acquisition costs. Notary fees, transfer duty and registration add between 2% and 15% depending on the country — enough to sink an offer.

How accurate is it, and what are the limits?

Estimate only, not financial advice. Real rates, fees, taxes and lender terms vary — confirm with your lender.

Further reading

All guides →
ExplainerA Construction Loan Is Not a MortgageFunds arrive in stages and interest accrues only on what has been drawn. On a $400,000 facility at 8.5 percent over twelve months, that is $18,062.50 rather than the $34,000 the headline rate implies — 53.13 percent of it.ExplainerFinancing Land Is the Hardest Money to BorrowLarger deposit, shorter term, higher rate, and a balloon at year five. On the same $120,000 plot, the land loan costs $768.10 a month against a mortgage's $606.79 — and demands $18,000 more at closing.How-toHow to Read an Amortization ScheduleUnderstand an amortization schedule row by row: how each payment splits into principal and interest, and why early payments are mostly interest.How-toHow Much Down Payment Do You Need to Buy a Home?How to work out a down payment: typical percentages, the 20% PMI threshold in the US, and how the amount you put down changes your monthly payment.ExplainerVA Loans: The Funding Fee and What You Are Not PayingNo down payment, no mortgage insurance at any loan-to-value ratio, and one funding fee — 2.15 percent on a first-use purchase with nothing down, waived entirely for disability-compensated veterans. On a $400,000 house that $8,600 fee equals between two and seven years of the private mortgage insurance it replaces.ExplainerWhat Is Loan-to-Value (LTV), and Which Bands Actually Change AnythingLoan divided by the lower of price and appraised value. The bands at 80, 90 and 95 percent are where pricing steps — and a valuation that comes in low moves you across one without you touching the deposit.