Construction Loan Calculator Widget

Show self-builders what a construction loan really costs. Pick an even, front-loaded, back-loaded or custom draw schedule and see the interest charged on the money drawn so far each month, the total interest during the build and the amortising payment once the loan converts to a permanent mortgage.

Real Estate Calculator Runs in your browser Free · no ads

Customize your widget

Theme
Auto follows the visitor's light/dark setting.
Style
Attribution on your page
Optional and entirely your choice. The exact line is shown in the code below; it links to the tool with rel="nofollow".
More options
Starting values
Leave blank to use the widget's defaults. Visitors can still change every value.

Live preview

Exactly what your visitors will see

Embed code

<iframe src="https://a2z.tools/embed/w/construction-loan-calculator" title="Construction Loan Calculator by A2Z Tools" width="100%" height="1000" style="border:0;width:100%" loading="lazy" allow="clipboard-write"></iframe>

A plain iframe. Works everywhere, including site builders that strip scripts. Adjust height if your content needs more room.

Works with

How it works

A construction loan is released in draws as the build reaches milestones, and interest is charged only on what has been drawn. The widget splits the loan into monthly draws - equal shares, a front-loaded pattern weighted towards the early months (n, n-1 ... 1), a back-loaded one weighted towards the end (1, 2 ... n), or your own percentages, which must add up to 100. Each draw is treated as released at the start of its month, so that month's interest is the total drawn so far times the annual rate over twelve. Summing those months gives the interest during construction, and a table lists every draw. For comparison it also shows the interest if the whole loan had been drawn on day one. When the build ends the full amount converts to a permanent loan, and the widget computes its level monthly payment at the permanent rate and term. Drawing $120,000 evenly over 12 months at 12% costs $7,800 of interest, not the $14,400 a fully drawn loan would.

Calculation method

  • Even draws: share = 1 / n; front-loaded: share_m = (n - m + 1) / sum; back-loaded: share_m = m / sum
  • Drawn balance in month m = loan x (share_1 + ... + share_m)
  • Interest in month m = drawn balance x annual rate / 12
  • Interest during construction = sum of the monthly interest
  • Payment after conversion = P x r / (1 - (1 + r)^-n), r = permanent rate / 12

Worked examples

Even draws over a year

Inputs: $120,000 at 12%; 12 even monthly draws; then 30 years at 6%

Result: Interest during construction $7,800; payment after conversion $719.46

The balances 10,000 to 120,000 sum to 780,000; 1% of that is the interest.

Larger build

Inputs: $400,000 at 8.5%; 12 even draws; then 30 years at 6.75%

Result: Interest during construction $18,417; highest monthly interest $2,833.33; payment after conversion $2,594.39

Fully drawn on day one, the same year would cost $34,000 of interest.

An illustration for budgeting a build, not financial advice. Draw rules and rates vary by lender.

Limitations

  • Draws are monthly and released at the start of each month; real draws follow inspections at irregular dates.
  • Assumes interest is paid monthly and the whole loan is drawn by the end of the build.
  • Fees, inspections, contingency and a rate change at conversion are not included.

Where publishers use it

  • A custom home builder's financing page
  • A self-build or ADU guide explaining stage payments
  • A regional bank's construction-to-permanent loan landing page
  • A barndominium or tiny-house blog with a budget walkthrough
  • An architect's client pack on the cost of a slow build

Questions

Why is construction interest lower than on a normal loan?

Because you only pay interest on money already drawn. If $120,000 is drawn in 12 equal parts at 12%, the average balance is $65,000, so the year's interest is $7,800 rather than the $14,400 on the full amount.

Does the draw schedule matter?

Yes - money drawn early costs interest for longer. Drawing $60,000 over three months at 12% costs $1,400 when front-loaded (30k, 20k, 10k) but $1,000 when back-loaded (10k, 20k, 30k). Land purchase and foundations usually make real schedules front-heavy.

How do I enter a custom schedule?

Type one percentage per month separated by commas, for example 20, 15, 15, 10, 10, 10, 5, 5, 5, 5 for a ten-month build. The number of entries sets the build length and they must add up to 100%.

Is construction interest paid monthly or added to the loan?

Most construction loans bill the interest monthly, which is what this widget assumes. Some roll it into the balance (an interest reserve); in that case the interest itself earns interest and the cost is a little higher.

What happens at conversion?

On a construction-to-permanent loan, the drawn balance becomes an ordinary mortgage. The widget assumes the whole loan was drawn and calculates the level payment; $200,000 at 6% for 30 years is $1,199.10 a month.

What triggers each draw?

Usually a milestone signed off by the lender's inspector: lot purchase, excavation and foundation, framing and roof (dried-in), rough plumbing and electrical, insulation and drywall, then finishes and the certificate of occupancy. Typing your contractor's milestone percentages into the custom schedule gives a closer estimate than the presets.

What is the difference between one-time close and two-time close?

A one-time close (single-close) loan converts to the permanent mortgage automatically, with one set of closing costs. A two-time close pays off the construction loan with a separate new mortgage, so you re-qualify and pay closing costs twice but can shop the permanent rate at completion.

What other costs should I budget for?

Origination fees, inspections for each draw, title updates, a contingency of several percent of the build cost and the interest on overruns if the build takes longer. They are not in this calculation.

Sources

  1. A Consumer's Guide to Mortgage Refinancings - Board of Governors of the Federal Reserve System . Reference payment used to test the permanent-loan formula: $200,000 for 30 years at 6% is $1,199 a month. Checked 2026-10-01.

Cite or recommend this tool

If you reference this tool in an article, course or documentation, these formats are ready to copy. They are optional - nothing is added to your site unless you paste it.

A2Z Tools Construction Loan Calculator
https://a2z.tools/embed/construction-loan-calculator

Related widgets

More Real Estate widgets →

Preview

CustomizeGet code