01
Enter Project Costs
Add the land cost, construction budget and contingency allowance for unexpected expenses.
Real Estate and Lending
Construction Loan Calculator
Estimate construction loan draws, monthly interest, interest reserve, lender fees, cash contribution, loan commitment, LTC, completed-value LTV and permanent mortgage payments.
Construction draw schedule
LTC and LTV analysis
Permanent loan estimate
Construction Project Details
Enter the land, building budget, loan terms, draw method and completed property value.
Construction Financing Estimate
Review the projected loan commitment, interest, leverage and conversion payment.
Estimated monthly construction payment
$0.00
Interest is added to the financed reserve
Projected payoff at completion
$0.00
Estimated construction loan balance
Permanent loan payment
$0.00
Principal and interest estimate
Base project loan
$0.00
Construction interest
$0.00
Interest reserve
$0.00
Lender points
$0.00
Total lender fees
$0.00
Estimated borrower cash
$0.00
Total project cost
$0.00
Contingency amount
$0.00
Estimated loan commitment
$0.00
Loan-to-cost ratio
0.00%
Completed-value LTV
0.00%
Equity at completion
$0.00
Average construction draw
$0.00
Average monthly interest
$0.00
Peak monthly interest
$0.00
First-month interest
$0.00
Total financing cost
$0.00
Project basis with financing
$0.00
The completed property value exceeds the projected
construction loan payoff.
Construction delays, change orders, inspections,
draw timing and interest-rate changes can increase
the final loan balance and required borrower cash.
Construction Financing
What Is a Construction Loan?
Understand how lenders release funds in stages while a residential or commercial property is being built.
A construction loan is short-term financing used to pay for land acquisition, labour, materials, permits, contractor invoices and other building expenses.
Instead of releasing the full construction budget at once, lenders commonly provide funds through a series of draws. Each draw may correspond with a completed stage of the project, such as foundation work, framing, roofing or interior completion.
Interest is generally calculated on the outstanding amount already drawn rather than the entire approved commitment. When construction is complete, the balance may be repaid, refinanced or converted into permanent financing.
How It Works
How to Use the Construction Loan Calculator
Estimate the project funding and draw interest in four straightforward steps.
02
Add Borrower Equity
Enter the cash contribution being applied toward the land and construction expenses.
03
Set Draw and Loan Terms
Choose the construction term, draw profile, interest rate, points and treatment of fees and interest.
04
Review the Financing
Compare the loan commitment, draw interest, LTC, LTV, cash requirement and permanent payment.
Project Measurements
Important Construction Loan Metrics
These measurements help explain project leverage, interest exposure and the expected financing position at completion.
Construction Draws
Funds released in stages as work is completed and approved according to the lender's draw process.
Interest Reserve
A financed amount used to cover estimated construction interest instead of requiring monthly borrower payments.
Loan-to-Cost Ratio
The projected construction loan commitment compared with the total land and building project cost.
Completed-Value LTV
The projected payoff balance compared with the estimated market value after construction.
Draw Schedule
Construction Loan Draw Preview
Review the estimated monthly construction draw, interest charge and outstanding loan balance.
| Month | Opening Balance | Construction Draw | Interest Charge | Cash Payment | Ending Balance |
|---|
Frequently Asked Questions
Construction Loan Calculator FAQs
Helpful answers about construction draws, interest reserves, contingencies, LTC and permanent financing.
Construction interest is generally based on the amount
already drawn and outstanding. As additional funds are
released, the balance and monthly interest charge can
increase.
A construction draw is a release of loan funds used to
pay eligible building expenses. Lenders may require
inspections, invoices, lien waivers or other documents
before approving a draw.
An interest reserve is a portion of the financing used
to pay construction-period interest. In this calculator,
financed interest is added to the outstanding balance.
A contingency allowance provides room for unexpected
costs, material price changes, design modifications and
other expenses that were not included in the original
construction budget.
Loan-to-cost compares the projected financing with the
total project cost. Loan-to-value compares the projected
payoff balance with the estimated completed property
value.
A construction-to-permanent loan is designed to finance
construction and then convert into longer-term mortgage
financing after the project is completed and applicable
conditions are satisfied.
No. The permanent mortgage payment estimate includes
principal and interest only. Property taxes, insurance,
association dues and other ownership expenses are not
included.
No. The results are educational estimates. Approval and
final terms depend on lender underwriting, plans,
permits, contractor qualifications, appraised value,
borrower credit, equity and other requirements.
Important: This construction loan
calculator is provided for general informational and
planning purposes only. It does not constitute a loan
offer, approval, appraisal, financial advice, tax advice,
accounting advice or legal advice. Actual results may vary.