Construction Loan Calculator
Use our free Construction Loan Calculator to estimate your payments during the building phase and your permanent mortgage. Understand your interest-only draw schedule and plan your finances before breaking ground.
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Loan Details
The total amount you are borrowing to build.
Estimate Your Loan
Enter your loan amount to see your estimated interest-only payments during construction and your permanent mortgage payment.
Phase 1: The Construction Draw Period
When you take out a construction loan, the bank doesn't hand you or your builder the entire loan amount on day one. Instead, the loan is disbursed in stages called draws as major milestones are completed (e.g., pouring the foundation, framing, roofing).
During this building period (typically 6 to 12 months), you only make interest-only payments. Furthermore, you only pay interest on the money that has actually been drawn.
This means your first month's payment might be just a few dollars, but your final payment right before the house is finished will be the highest, as the full loan amount has been disbursed.
Phase 2: Permanent Mortgage Conversion
Once construction is complete and the home receives its certificate of occupancy, the loan converts to a permanent mortgage.
At this point, you begin making standard amortized payments that include both Principal and Interest (P&I). Our calculator estimates this permanent monthly payment so you know exactly what your long-term housing costs will be after you move in.