Construction Loan Calculator

This construction loan calculator shows the interest you pay while your house is being built and your monthly mortgage once it is finished. Construction loans charge interest only on the money drawn so far, so payments start small and rise as the builder is paid.

How is construction loan interest calculated?

Construction loan interest is charged monthly on the outstanding drawn balance, not the full loan amount. If $100,000 has been drawn at 8.5%, that month’s interest is about $708 ($100,000 × 8.5% ÷ 12). As more draws are released, the payment grows until the home is finished. The calculator assumes equal monthly draws, which is close to how most builds are funded.

What happens to the payment after construction?

When the house is complete, a construction-to-permanent loan converts to a standard mortgage and you start paying principal and interest. The calculator shows that payment using the mortgage rate and term you enter. See construction-to-permanent loans.

What inputs should you use?

  • Construction cost: use the total from the home building cost calculator.
  • Land value: the price you are paying, or the value of land you own (often counts toward the down payment).
  • Down payment: typically 20–25% conventional, 3.5% FHA, 0% VA or USDA (The Lenders Network, 2026).
  • Construction rate: usually 1–2 points above 30-year mortgage rates. Use a lender quote if you have one.
  • Build time: 7.6 months was the 2024 average from start to completion, about 12 months for contractor-built homes from permit (U.S. Census Bureau).

What does the calculator leave out?

It excludes closing costs ($12,000–$18,000 for a one-time close), draw inspection fees ($300–$500 each), property taxes, insurance and any rate lock fees. Learn more in our construction loans guide.

Sources

Loan terms change often and vary by lender. Nothing on this page is a loan offer or financial advice: confirm current rates, fees and eligibility with lenders before you apply.