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Construction loan draw schedule
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Plan your construction loan draws stage by stage, with the loan balance and interest-only payments during the build.
How this calculator works
A construction loan pays the builder in stages, called draws, as work is inspected and completed, rather than all at once. Lenders usually require your own cash, the part the loan does not cover, to be spent first. During construction you typically pay interest only on the amount drawn so far, so payments start small and grow as the house goes up. When the house is finished, the loan usually converts to, or is paid off by, a regular mortgage. Stage names and percentages vary by lender and builder, so adjust them to match your contract.
Common questions
How do construction loan draws work?
The lender releases money in stages as work is completed and inspected, such as foundation, framing, rough-ins, drywall, and finishes, rather than paying the full loan at once.
How is construction loan interest calculated?
Usually as interest only on the amount drawn so far, so monthly payments start small and grow as more of the loan is used. Lenders typically require your own cash to be spent before loan funds.
What happens when construction is finished?
The loan usually converts to a regular mortgage or is paid off by one. Ask your lender whether you will have one closing or two.
Disclaimer: These are ballpark estimates only. Real costs depend on your location, site conditions, materials, and the market. Get written quotes from licensed contractors and your lender before you set a budget.
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