Construction Loan Calculator – Building Loan & Home Construction Payment Calculator
Use our free construction loan calculator to calculate construction loan payments, interest costs, and draw schedules for your building project. Whether you need a building loan calculator, home construction loan calculator, or construction to permanent loan calculator, our comprehensive tool helps you estimate interest-only payments during construction and permanent mortgage costs. This builders loan calculator and home building loans calculator includes land costs, draw schedules, and construction-to-permanent financing options.
Construction Loan Calculator
During Construction (Interest Only)
$937.50
Average monthly for 12 months
After Construction (P&I)
$1,995.91
Monthly for 30 years
Total Project Cost
$375,000.00
Land + Construction
Loan Amount
$300,000.00
80.0% LTV
Down Payment
$75,000.00
20.0% of project
Construction Interest
$11,250.00
Interest-only phase
Permanent Interest
$418,526.69
Over 30 years
Total Interest
$429,776.69
Both phases combined
Total Cost Summary
Total Cost Breakdown
Amortization Schedule
| # | Payment | Principal | Interest | Remaining Balance |
|---|---|---|---|---|
| 1 | $1,995.91 | $245.91 | $1,750.00 | $299,754.09 |
| 2 | $1,995.91 | $247.34 | $1,748.57 | $299,506.75 |
| 3 | $1,995.91 | $248.78 | $1,747.12 | $299,257.97 |
| 4 | $1,995.91 | $250.24 | $1,745.67 | $299,007.73 |
| 5 | $1,995.91 | $251.70 | $1,744.21 | $298,756.03 |
| 6 | $1,995.91 | $253.16 | $1,742.74 | $298,502.87 |
| 7 | $1,995.91 | $254.64 | $1,741.27 | $298,248.23 |
| 8 | $1,995.91 | $256.13 | $1,739.78 | $297,992.10 |
| 9 | $1,995.91 | $257.62 | $1,738.29 | $297,734.48 |
| 10 | $1,995.91 | $259.12 | $1,736.78 | $297,475.36 |
| 11 | $1,995.91 | $260.63 | $1,735.27 | $297,214.73 |
| 12 | $1,995.91 | $262.15 | $1,733.75 | $296,952.57 |
2025 Construction Loan Rates & Market Statistics
What is a Construction Loan and How to Calculate Construction Loan Interest
A construction loan (also called a building loan or home construction loan) is a short-term loan used to finance the cost of building a new home or major renovation. Understanding how to calculate interest on a construction loan is essential for home builders. Our comprehensive construction loan calculator, building loan calculator, and home builder loan calculator instantly show you construction loan costs, interest-only payments during construction, and total project financing. Use this free construction loan calculator and construction finance calculator to see exactly what your payments will look like during both the construction phase and after conversion to a permanent mortgage.
Most construction loans have two distinct phases that our construction loan payment calculator and builders loan calculator account for:
- Construction Phase (Interest-Only): During construction (typically 6-18 months), you only pay interest on the amount drawn, not the full loan. Our interest only construction loan calculator and construction loan interest payment calculator show these payments.
- Permanent Phase (P&I): After construction, the loan can convert to a standard mortgage with principal and interest payments. Our construction to permanent loan calculator and construction perm loan calculator calculate this conversion.
How Do You Calculate Interest on a Construction Loan – Step by Step
Learning how to calculate interest on a construction loan and calculating construction loan interest is essential. Our construction loan interest calculator does this automatically. During construction, interest is calculated monthly on the current drawn balance (not the full loan amount). For example: if you've drawn $150,000 at 8% annual rate, monthly interest = $150,000 × 0.08 ÷ 12 = $1,000. As more funds are drawn, interest increases. Our simple construction loan calculator and construction loan monthly payment calculator factor in: 1) Draw schedule timing, 2) Construction interest rates, 3) Amount drawn at each stage, 4) Construction period length, and 5) Permanent loan terms if converting.
Our construction loan rates calculator, mortgage calculator construction loan, and mortgage calculator for construction loan show you the complete picture including average interest-only payments during construction. Use our construction house calculator and house building loan calculator to see exactly how interest accrues with each draw using the draw schedule visualization.
Types of Construction Loans: Stand-Alone vs Construction-to-Permanent
Different construction loan types suit different needs and budgets. Our construction loan calculators support all common loan types, allowing you to compare payments, total costs, and construction loan amortization schedule projections. Whether you need a new construction loan calculator, new construction loans calculator, or one time close construction loan calculator, our comprehensive construction mortgage calculator and new construction mortgage calculator provide detailed estimates for each option.
Construction-to-Permanent Loan (One-Time Close)
Single loan that covers construction and converts to permanent mortgage. Most popular option. Use our construction to permanent loan calculator and construction loan to mortgage calculator to estimate total costs.
- First-time home builders
- Saving on closing costs (only one closing)
- Locking in permanent rate from start
- Simplified paperwork and process
Stand-Alone Construction Loan (Two-Time Close)
Separate construction loan paid off when building completes, then refinanced into permanent mortgage. Use our building mortgage calculator and new build mortgage calculator for this option.
- Experienced builders
- Flexibility to shop permanent rates later
- Short construction timeline
- Potential rate improvements during building
Use our construction loan calculator with land, land and construction loan calculator, and simple construction loan calculator with land equity if you already own the property. These specialized land equity construction loan calculator and home construction calculator tools help you leverage existing land equity to reduce your down payment requirements and overall construction loan cost.
Understanding Construction Loan Draw Schedules and Interest Calculations
A draw schedule shows how construction loan funds are released in stages as building progresses. Understanding the draw process is crucial for calculating construction loan interest accurately. Our construction loan interest calculator, construction loan interest only payment calculator, and interest only construction loan calculator show exactly how interest accrues with each draw. The construction loan payment calculator and construction loan monthly payment calculator visualize when draws occur and how they impact your interest-only payments.
Typical Construction Loan Draw Schedule Example
| Draw Stage | Timing | % Released | Example ($300k loan) | Cumulative Balance |
|---|---|---|---|---|
| 1. Foundation | Month 2 | 20% | $60,000 | $60,000 |
| 2. Framing | Month 4 | 20% | $60,000 | $120,000 |
| 3. Rough-In | Month 6 | 20% | $60,000 | $180,000 |
| 4. Drywall | Month 9 | 20% | $60,000 | $240,000 |
| 5. Final | Month 12 | 20% | $60,000 | $300,000 |
*This example shows equal 20% draws. Actual percentages vary by lender and project. Use our construction loan calculator to customize your draw schedule.
Our construction financing rates calculator and construction loan estimate tool automatically calculate interest for each draw period. You'll see exactly when draws occur and how they impact your average monthly interest payment in the interactive draw schedule chart. This is essential for accurate loan estimate for construction loan and loan estimate for construction loans planning.
Key Point: Interest-Only Payments Increase with Each Draw
Unlike traditional mortgages, construction loan interest only payment calculator results show payments that increase as more funds are drawn. If you draw $100,000 in month 1 and $50,000 in month 3, your interest payment increases in month 3. Our how much are construction loans calculator and construction mortgage rate estimator show the average payment across the construction period. Use region-specific tools like our construction loan calculator texas for localized estimates.
Real-World Construction Loan Examples and Cost Estimates
Let's walk through detailed construction loan estimate examples using our home construction loan calculator, new home construction loan calculator, and mortgage calculator building home to show exactly how construction loans work in practice. These examples demonstrate how much of a construction loan can i get and help you understand construction loan costs in real-world scenarios.
Example 1: $400,000 Construction-to-Permanent Loan (Land Already Owned)
Scenario: Building $400,000 home on owned land, 12-month construction. Using our construction loan calculator with land and simple construction loan calculator with land equity:
- Construction cost: $400,000
- Land equity (already own): $100,000 (counts as down payment)
- Loan amount: $300,000
- Construction rate: 8.0% (interest-only for 12 months)
- Average monthly interest: $1,000 (increases from $500 to $2,000 as funds draw)
- Total construction interest: $12,000
- Permanent rate: 7.0% for 30 years
- Permanent monthly P&I: $1,996
Using land equity reduces the required cash down payment significantly. Our land equity construction loan calculator shows you save on down payment while building equity immediately.
Example 2: $500,000 Project with Land Purchase (Construction-to-Permanent)
Scenario: $75,000 land + $350,000 construction = $425,000 total. Using our land and construction loan calculator and how much construction loan can i afford calculator:
- Total project cost: $425,000
- Down payment (20%): $85,000 cash
- Loan amount: $340,000
- Construction period: 15 months at 8.5%
- Average interest-only payment: $1,208/month
- Total construction interest: $18,120
- Permanent loan: $340,000 at 7.25% for 30 years
- Permanent monthly payment: $2,321
- Total cost (with down payment): $921,680
Our construction loan down payment calculator and can i afford to build a house calculator show that you need approximately $100,000-$110,000 in liquid assets for this project (down payment + reserves).
Example 3: Stand-Alone Construction Loan vs Construction-to-Permanent
Scenario: Comparing loan types for $300,000 construction project using our new construction loan calculator and new construction mortgage calculator:
- One set of closing costs: $6,000
- Rate locked from start
- Construction interest: $12,000
- Total costs: $18,000
- Converts automatically
- Two sets of closing costs: $12,000
- Refinance at completion
- Construction interest: $12,000
- Total costs: $24,000
- Can shop for better rate
Savings with construction-to-permanent: $6,000 in closing costs. Use our one time close construction loan calculator and building loan calculator to compare for your situation.
How Much Construction Loan Can I Get and Qualify For?
Determining how much of a construction loan can i get involves several factors that lenders evaluate carefully. Our how much construction loan can i afford calculator and can i afford to build a house calculator help you understand your borrowing capacity before applying. Understanding qualification requirements is crucial for planning your construction project budget.
Key Construction Loan Qualification Factors
- Debt-to-income ratio: Typically 43% or lower
- Credit score: Usually 680+ (better rates at 720+)
- Down payment: 20-25% of total project cost
- Cash reserves: 2-6 months of payments
- Detailed construction plans and budget
- Licensed contractor agreements
Maximizing Your Construction Loan Amount
- Use land equity with our land equity construction loan calculator
- Include detailed cost estimates in application
- Show proof of income stability and reserves
- Get pre-qualified before house hunting
- Consider construction-to-permanent for better terms
- Shop multiple lenders using our calculators
Use our construction loan down payment calculator to determine required cash for your project. Most lenders require 20-25% down, but if you own land, our simple construction loan calculator with land equity shows how that equity can reduce cash requirements. The construction house calculator helps you budget total costs including down payment, construction interest, and contingency funds.
Understanding Construction Loan Costs, Fees, and Interest Rates
When calculating construction loan cost and construction loan costs, you need to understand all components beyond just interest. Our construction loan interest rates calculator, construction financing rates tool, and construction mortgage rate calculator help you estimate total expenses. Understanding construction interest rates and fees is crucial for accurate budgeting.
| Cost Component | Description | Typical Amount/Range |
|---|---|---|
| Construction Interest Rate | Interest-only during building (1-2% higher than traditional) | 7.5% - 9.5% (2025) |
| Loan Origination Fee | Lender processing and underwriting fees | 1-2% of loan amount |
| Draw Inspection Fees | Inspector verifies completion before each draw | $300-$500 per draw |
| Appraisal Fee | Property appraisal (often higher for new construction) | $500-$1,000 |
| Closing Costs | Title, recording, attorney fees, etc. | 2-5% of loan |
Our construction loan estimate and loan estimate for construction loan calculators automatically include typical fees in your projections. The how much are construction loans calculator provides total cost estimates including all fees and interest. Use our loan estimate for construction loans tool to get a comprehensive cost breakdown before applying.
Construction Loan Planning: Using Calculators to Budget Your Build
Proper planning is essential for construction project success. Our simple construction loan calculator, home construction calculator, and construction house calculator help you create a realistic budget before breaking ground. Use these construction loan calculators together to see the complete financial picture of your building project.
| Planning Factor | What to Consider | Calculator to Use |
|---|---|---|
| Total Budget | Add 10-20% contingency for unexpected costs | home building loans calculator |
| Down Payment | 20-25% cash or land equity required | construction loan down payment calculator |
| Monthly Costs | Interest-only plus existing rent/mortgage | construction loan monthly payment calculator |
| Timeline | Factor in weather delays and permit time | construction loan interest calculator |
| Long-Term Cost | Permanent mortgage payment must be affordable | construction to permanent loan calculator |
Essential Construction Loan Planning Checklist
Before applying, use our construction finance calculator to verify: 1) Total project cost including contingency, 2) Required down payment (cash + land equity), 3) Average monthly interest during construction, 4) Permanent mortgage payment affordability, 5) Cash reserves for 3-6 months expenses. Our can i afford to build a house calculator helps ensure you're financially prepared for the entire journey from groundbreaking to move-in.
Common Mistakes When Using a Construction Loan Calculator
Mistake #1: Not Budgeting for Contingencies
Don't assume your construction loan estimate covers everything. Always add 10-20% contingency for unexpected costs. Use our builders loan calculator to include realistic contingency amounts in your total project budget for accurate loan estimate for construction loans.
Mistake #2: Underestimating Construction Interest
Interest-only payments increase as draws occur. When using our interest only construction loan calculator and construction loan interest only payment calculator, remember you'll pay interest on the drawn balance throughout construction. Our calculating construction loan interest tool shows total interest paid during the building phase.
Mistake #3: Forgetting About Two Housing Payments
If you don't own land, you'll likely pay both construction loan interest AND rent/mortgage during building. Our how much construction loan can i afford calculator and can i afford to build a house calculator help you budget for dual housing costs during the construction period.
Mistake #4: Not Using Land Equity Strategically
If you own land, use our land equity construction loan calculator, construction loan calculator with land, and land and construction loan calculator to see how equity reduces required cash down payment. Our simple construction loan calculator with land equity maximizes your purchasing power.
Frequently Asked Questions – Construction Loans & Building Loan Calculators
How to calculate interest on a construction loan?
To calculate interest on a construction loan and how do you calculate interest on a construction loan, multiply the current drawn balance by the monthly interest rate (annual rate ÷ 12). For example: $200,000 drawn at 8% = $200,000 × 0.08 ÷ 12 = $1,333/month. Interest increases with each draw. Our construction loan interest calculator, interest only construction loan calculator, and construction loan interest payment calculator automate this calculation. Use our construction loan interest only payment calculator and calculating construction loan interest tools to see average payments across the entire construction period and total interest paid.
How much construction loan can I afford and how much of a construction loan can I get?
Use our how much construction loan can i afford calculator and can i afford to build a house calculator to determine affordability. Lenders typically require: 1) Debt-to-income ratio under 43%, 2) 20-25% down payment, 3) Credit score 680+, 4) Cash reserves for 3-6 months. To find how much of a construction loan can i get, calculate 28-36% of your gross monthly income for the permanent payment. Our construction loan down payment calculator and how much are construction loans tool help you determine total borrowing capacity and required cash.
What is a construction-to-permanent loan and one time close construction loan?
A construction-to-permanent loan (also called construction perm loan or one time close construction loan) combines construction financing and permanent mortgage into one loan. You pay interest-only during construction, then it automatically converts to a standard P&I mortgage. Benefits include: one closing (saves $4,000-$8,000), rate locked from start, simplified process. Use our construction to permanent loan calculator, construction loan to mortgage calculator, and construction perm loan calculator to compare costs against stand-alone construction loans.
What are construction interest rates and construction financing rates in 2025?
Construction interest rates and construction financing rates typically run 1-2% higher than traditional mortgages. In 2025, construction loan rates range from 7.5-9.5% depending on credit, down payment, and lender. Construction mortgage rate for permanent phase is usually 0.5-1% lower. Use our construction loan rates calculator, construction loan interest rates calculator, and construction mortgage rate estimator to see current rates and total construction loan cost projections. Regional tools like our construction loan calculator texas provide localized estimates.
What is a construction loan draw schedule?
A draw schedule outlines when construction loan funds are released in stages as building progresses. Typical stages: foundation (20%), framing (20%), rough-in/mechanical (20%), drywall (20%), completion (20%). Lenders inspect each stage before releasing funds. Our construction loan calculator, building loan calculator, and home construction loan calculator visualize draw schedules showing when funds release and how interest accrues at each stage. Use our construction loan amortization schedule viewer to track the progression.
How do construction loan calculators work with land?
Our construction loan calculator with land, land and construction loan calculator, and land equity construction loan calculator let you include owned land as part of your down payment. If you own $75,000 land for a $400,000 project, you may only need $25,000 cash (total 25% down). Our simple construction loan calculator with land equity shows how land ownership reduces required cash and improves loan terms. This home builder loan calculator feature is essential for those building on owned property.
What construction loan costs and fees should I budget for?
Construction loan costs and construction loan cost include: origination fees (1-2%), draw inspection fees ($300-500 per draw), appraisal ($500-1,000), closing costs (2-5% of loan), and construction interest. Our construction loan estimate, loan estimate for construction loan, and loan estimate for construction loans calculators include all typical fees. Use our new construction loan calculator and new construction loans calculator to see complete cost breakdown before committing to your building project.
Should I use a stand-alone or construction-to-permanent loan?
Use a construction-to-permanent loan if you want: one closing (saves money), locked permanent rate, simplified process. Use a stand-alone construction loan if you want: flexibility to shop rates after building, shorter construction timeline, potential rate improvements during construction. Our building mortgage calculator, new build mortgage calculator, and mortgage calculator building home help compare both options. The construction mortgage calculator shows that construction-to-permanent typically saves $4,000-$8,000 in closing costs.
How accurate are construction loan calculators?
Our construction loan calculators, including simple construction loan calculator, home construction calculator, construction finance calculator, and construction house calculator tools, provide accurate estimates based on industry-standard formulas. However, actual rates, fees, and terms vary by lender. Use our free construction loan calculator, builders loan calculator, and home building loans calculator for planning, then get official quotes from multiple lenders. Regional variations exist – our construction loan calculator texas and similar tools account for local market conditions.
What is the difference between various construction loan payment calculators?
Our suite includes: construction loan payment calculator (basic monthly costs), construction loan monthly payment calculator (detailed payment tracking), interest only construction loan calculator (construction phase focus), construction to permanent loan calculator (both phases), mortgage calculator construction loan (comprehensive costs), and mortgage calculator for construction loan (comparison tool). Use the new home construction loan calculator for new builds or construction loan interest calculator to focus on interest costs specifically.
Related Mortgage Tools & Financial Calculators
Understanding construction loans is just the start. CalcNavigator offers a complete suite of calculators and guides to help you make the most informed building and mortgage decisions:
Traditional Mortgage Calculator
Compare traditional mortgages against construction loans to see which offers better value. Calculate standard monthly P&I payments for 15-year and 30-year fixed-rate permanent mortgages.
Refinance Calculator
Determine if refinancing your construction loan to a permanent mortgage makes financial sense. Calculate break-even points and long-term savings.
Home Affordability Calculator
Find out how much house you can afford to build based on income and debts. Essential for determining your construction budget before applying for a building loan.
Land Loan Calculator
Calculate financing for land purchase before construction. See how land equity impacts your construction loan down payment requirements and total project costs.
Financial Education Guides for Construction Loans
Enhance your construction loan knowledge with our expert-backed guides on building financing and smart borrowing strategies:
Mortgage Payments Explained: Principal vs Interest
Learn how mortgage payments work and understand the difference between interest-only construction payments and permanent P&I mortgages. Essential reading for construction loan borrowers.
How Much House Can I Afford? Complete Guide
Calculate your building budget ensuring you can afford both construction interest payments and the permanent mortgage payment after completion.
Rent vs Buy: Which Is Cheaper in 2026?
Understand the costs and benefits of building your own home versus buying existing. Learn when construction loans make sense for building long-term wealth.
How to Calculate Monthly Loan Payments
Master loan payment calculations and understand the math behind interest-only construction payments and permanent mortgage amortization.
Make Informed Construction Loan Decisions Today
Choosing the right construction financing can save you tens of thousands of dollars and make your building project successful. If our construction loan calculator, building loan calculator, and construction loan interest calculator show manageable costs during your construction period, you're ready to move forward. Using our home construction loan calculator, construction finance calculator, and construction mortgage calculator tools together helps you understand exactly how to calculate interest on a construction loan, estimate total costs, and compare financing options using detailed construction loan amortization schedule projections.
Your Construction Loan Action Plan:
- Calculate Your Budget – Use our home building loans calculator with realistic costs
- Check Affordability – Use how much construction loan can i afford calculator
- Review Interest Costs – Study construction loan interest only payment calculator results
- Compare Loan Types – Test construction-to-permanent vs stand-alone with our calculators
- Plan Down Payment – Use construction loan down payment calculator and land equity tools
- Get Pre-Approved – Shop multiple lenders with your calculator estimates
Key Construction Loan Principles:
- • Interest-only during construction saves cash flow
- • Draw schedule timing impacts total interest paid
- • Land equity reduces required cash down payment
- • Construction-to-permanent loans save closing costs
- • Always budget 10-20% contingency for unexpected costs
- • Use our can i afford to build a house calculator before committing
Important Financial Disclaimer
CalcNavigator's free construction loan calculator, building loan calculator, home construction loan calculator, and all related construction loan calculators provide estimates for educational and planning purposes only and should not be considered professional financial or mortgage advice.
Always consult with qualified financial professionals, mortgage advisors, licensed builders, and construction loan officers before making building financing decisions using our construction loan payment calculator, construction finance calculator, interest only construction loan calculator, construction to permanent loan calculator, and other calculation tools.
Privacy & Security: CalcNavigator does not store your personal financial information, project details, or construction loan scenarios entered into our construction loan interest calculator, mortgage calculator construction loan, construction loan monthly payment calculator, or any other construction calculator tools. All calculations for construction loan amortization schedule, construction loan estimate, and loan estimate for construction loans scenarios are performed locally in your browser for maximum security and privacy. We do not sell or share calculator data with lenders, financial institutions, contractors, or third parties.
This comprehensive construction loan calculator suite, including our builders loan calculator, home builder loan calculator, new construction loan calculator, construction perm loan calculator, construction loan interest payment calculator, land equity construction loan calculator, construction loan calculator with land, one time close construction loan calculator, and all related home construction calculator tools, was developed by CalcNavigator's team of financial and construction lending experts to help you make informed building financing decisions using industry-standard calculation methods. Last updated December 19, 2025.