Construction Loan Calculator: Payment During Build
Work out the monthly payment and total interest on a construction loan — the short-term financing that pays the builder during the build, before being replaced or converted into a permanent mortgage.
Adjust the inputs and select Calculate for a full breakdown.
Year-by-year amortization schedule
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Monthly payment | Total interest | Total of payments |
|---|---|---|---|
| $300k · 9% · 1-year | $26,235.44 | $14,825.32 | $314,825.32 |
| $150k · 10.5% · 1-year | $13,222.29 | $8,667.49 | $158,667.49 |
| $600k · 8.5% · 2-year | $27,273.40 | $54,561.72 | $654,561.72 |
| $80k · 11% · 1-year | $7,070.53 | $4,846.39 | $84,846.39 |
How This Calculator Works
Enter the construction loan amount, the APR, and the term. The calculator turns the rate into one constant monthly payment using the amortization formula and shows total interest across the term. Real-world construction loans are usually interest-only on drawn balances during the build — this model is a simplified upper bound for budgeting.
The Formula
Fixed-Rate Amortization
P = loan amount, r = monthly rate (APR ÷ 12), n = number of monthly payments
Worked Example
A $300,000 construction loan at 9% APR over 1 year amortized in full produces a monthly payment of about $26,235. Most builds run as interest-only during construction (interest only on the amount drawn so far), so actual monthly cash needed is much lower until completion.
Key Insight
Construction loans price higher than permanent mortgages because the lender is funding work-in-progress with no finished collateral. The simplest path is a construction-to-permanent loan that converts to a regular mortgage at completion, saving a second round of fees and underwriting. Compare the all-in cost — rate plus origination, plus appraisal, plus inspection draws — not just the headline APR.
Frequently Asked Questions
How is a construction loan different from a mortgage?
It funds the build itself, not the purchase of a finished home. Funds are drawn in stages as construction milestones are met, and most loans run interest-only during the build until full conversion or payoff.
Why are construction loan rates higher?
The lender is financing work-in-progress with no finished collateral and substantial completion risk. Rates typically price at prime plus 1 to 3 points, sometimes more for owner-builder projects.
What is construction-to-permanent financing?
A single loan that funds the build and converts to a regular mortgage at completion. It saves a second round of closing costs and underwriting compared to two separate loans.
What happens at completion?
Either you pay off the construction loan with a permanent mortgage you arrange separately, or it converts to a permanent mortgage if you used construction-to-permanent financing.
Do I make payments during the build?
Yes, but usually interest-only on the amount drawn so far. Cash needed grows as more of the loan is drawn, peaking right before completion when the full principal is outstanding.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source. The starting values for interest rate are taken from the benchmarks below and refresh whenever the snapshots are updated.
Methodology & Review
Payments use the standard fixed-rate amortization formula on the full loan amount and term. Real-world construction loans usually run as interest-only on drawn balances during the build phase, with full principal due (or converted) at completion — this fixed amortization model is a simplified upper bound.
Written by Ugo Candido · Last updated May 17, 2026.