Build Loan Calculator
Construction Loan Calculator works out Interest during construction and Average outstanding balance from Amount financed for construction, Construction loan rate and Construction period. The default figures on this page give interest during construction of 9,750.00; change any entry and the result, the working and the sources update together.
Your figures
Updates as you typeHow this is worked out
5 steps
- Monthly rate = 6% / 12 = 0.5% per month
- Draws total 300000 over 12 months, peaking at 300000
- Average outstanding balance = 162500
- Construction interest = sum of balance x 0.005 each month = 9750
- Permanent loan of 300000 at 6% over 30 years pays 1798.65 a month
Draw and interest scheduletable
| month | draw | balance | interest |
|---|---|---|---|
| 1 | 25,000 | 25,000 | 125 |
| 2 | 25,000 | 50,000 | 250 |
| 3 | 25,000 | 75,000 | 375 |
| 4 | 25,000 | 100,000 | 500 |
| 5 | 25,000 | 125,000 | 625 |
| 6 | 25,000 | 150,000 | 750 |
| 7 | 25,000 | 175,000 | 875 |
| 8 | 25,000 | 200,000 | 1,000 |
| 9 | 25,000 | 225,000 | 1,125 |
| 10 | 25,000 | 250,000 | 1,250 |
| 11 | 25,000 | 275,000 | 1,375 |
| 12 | 25,000 | 300,000 | 1,500 |
Its 4 worked examples are re-run on every release, last on 15 September 2026. What changed
Sources and references
4 sources
Keep this result
Save it, change one figure, then compare the two
The calculation stays free. Save this scenario, adjust one assumption, save that too, and put them side by side to see exactly what the change costs you. A free account keeps 5 scenarios and 2 comparisons; Personal makes both unlimited and adds exports and private links. Nothing is saved unless you press Save.
What the Construction Loan Calculator calculates
Computes interest-only carry on a construction loan drawn in stages, the average and peak outstanding balance, the interest reserve needed, and the payment on the permanent loan the balance converts to.
How to use this Construction Loan Calculator
Enter Amount financed for construction, Construction loan rate, Construction period and Draw pattern. Interest during construction updates as you type, and “Use a worked example” loads checked figures you can adjust. Change one figure at a time to see what drives the result.
How the result is worked out
Open “How this is worked out” beside the result for the step-by-step calculation behind Interest during construction, Average outstanding balance and Peak drawn balance.
The method follows Interest-only accrual on a drawn balance: interest = outstanding balance x nominal annual rate / 12, US Small Business Administration - construction loan draw schedules and interest reserves, Standard annuity payment for the permanent loan: PMT = P i / (1 - (1+i)^-n) and BUILDABLE_REVIEW_NEEDED.
300,000 at 6% over 12 equal monthly draws example
With Amount financed for construction: 300000, Construction loan rate: 6, Construction period: 12, Draw pattern: even, the calculator returns Interest during construction: 9750, Average outstanding balance: 162500, Peak drawn balance: 300000. This example is checked against an independent source in the test suite.
What you can compare
Change one input at a time to see how it affects Interest during construction, Average outstanding balance and Peak drawn balance. The inputs you can vary are Amount financed for construction, Construction loan rate, Construction period, Draw pattern, Custom draw amounts and Loan and inspection fees.
Understanding Interest during construction, Average outstanding balance and Peak drawn balance
A cash-flow projection from the draw schedule, rate and terms you enter. Real construction loans add inspection and draw fees, retainage, contingency, variable index rates and lender-specific conversion terms; the lender term sheet governs.
Results are general information, not financial, tax, legal, medical or engineering advice. Check any decision that matters with a qualified professional.
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Frequently asked questions
What is the monthly payment on a $300,000 construction loan?
On the figures this page opens with — amount financed for construction 300,000 and construction loan rate 6 percent/year — the interest during construction is 9,750. No single number fits everyone: change any figure above and the answer updates as you type, with each step of the arithmetic beside it.
Do I have to put 20% down on a construction loan?
Computes interest-only carry on a construction loan drawn in stages, the average and peak outstanding balance, the interest reserve needed, and the payment on the permanent loan the balance converts to. On the figures this page opens with — amount financed for construction 300,000 and construction loan rate 6 percent/year — the interest during construction is 9,750. Put your own figures in their place and the working updates beside the result.
How much can you borrow on a construction loan?
It needs Amount financed for construction, Construction loan rate, Construction period, Draw pattern, Custom draw amounts and Loan and inspection fees. Nothing else is required, and the figures stay in your browser.
What is the monthly payment for a $200,000 construction loan?
The result gives Interest during construction, Average outstanding balance, Peak drawn balance, First month interest payment, Final month interest payment and Interest reserve needed, each labelled with its unit so the figure can be read on its own.
What information do I need for the Construction Loan Calculator?
You need Amount financed for construction, Construction loan rate, Construction period, Draw pattern, Custom draw amounts, Loan and inspection fees, Permanent loan rate and Permanent loan term. The page opens with default figures that give interest during construction of 9,750.00, so you can see the scale before entering your own.
What does this Construction Loan Calculator show?
It shows Interest during construction, Average outstanding balance, Peak drawn balance, First month interest payment, Final month interest payment, Interest reserve needed, Total cost of the construction phase and Permanent loan amount, with the working and any warnings for your entries.