MoneyLifeCalcAll calculators / Home
Construction loan draw schedule
Your privacy: everything you enter stays on your own device. It's saved in your browser so it's still here next time, and we never collect or see it.your numbers stay on this device. We never see them. Backups · Privacy policy
Plan your construction loan draws stage by stage, with the loan balance and interest-only payments during the build.
- Loan amount$400,000
- Your cash, spent first$100,000
- Highest interest-only payment$2,833
- Stages add up to100%
Draws are spread evenly across the build. Interest is estimated monthly on the balance drawn; lender fees and inspection costs are not included.
Draw schedule
| Stage | Month | Draw | From your cash | From the loan | Loan balance | Monthly interest |
|---|---|---|---|---|---|---|
| Foundation | 2 | $50,000 | $50,000 | $0 | $0 | $0 |
| Framing | 3 | $100,000 | $50,000 | $50,000 | $50,000 | $354 |
| Roof, windows, and rough-ins | 5 | $100,000 | $0 | $100,000 | $150,000 | $1,063 |
| Insulation and drywall | 7 | $75,000 | $0 | $75,000 | $225,000 | $1,594 |
| Finishes and fixtures | 8 | $125,000 | $0 | $125,000 | $350,000 | $2,479 |
| Final inspection | 10 | $50,000 | $0 | $50,000 | $400,000 | $2,833 |
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.
A worked example
The example is a $500,000 build with a loan covering 80%, or $400,000, at 8.5% over a 10-month build. The owner's $100,000 is spent first. It pays for the foundation draw of $50,000 in month 2 and half of the $100,000 framing draw in month 3.
From that point the loan carries the project. After framing the balance is $50,000 and the interest-only payment is about $354 a month. After the roof, windows, and rough-ins it is $150,000 and about $1,063 a month. By the final draw the full $400,000 is out and the payment is about $2,833 a month. Interest over the whole build comes to about $12,219.
If the build takes 14 months, the interest rises to about $15,406. Delays cost money even when the price of the house does not change.
How to read your results
The draw schedule table shows each stage, the month it is expected, how much comes from your cash and how much from the loan, and the interest-only payment that follows. Use the "Highest interest-only payment" row to check that you can carry the largest payment at the same time as your current rent or mortgage.
The calculator spaces the stages evenly across the build. Real projects are not that tidy. Framing often moves quickly, and finishes take longer than anyone expects. Treat the months as an approximation and the totals as a planning figure.
Common mistakes to avoid
- Budgeting only for the house. Interest during construction, inspection fees for each draw, and loan closing costs are real and are paid on top of the build cost.
- Forgetting where you live in the meantime. For most of the build you are paying for two homes.
- Assuming the schedule will hold. Weather, inspections, and material lead times cause delays. Try the build time a few months longer to see the cost.
- Accepting a front-loaded schedule. Draws should follow completed work. A schedule that pays out faster than the house is built leaves you exposed if something goes wrong.
Read the guide: How construction loan draws work
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.
What is retainage?
A portion of each draw, often 5% to 10%, that is held back until the work is fully complete. It gives the builder a reason to finish the last details. Whether it applies depends on your contract and lender.
Who decides when a draw is paid?
The builder requests it, and the lender usually sends an inspector to confirm that the stage is complete before releasing money. Many lenders also require lien waivers from the builder and suppliers.
What if the build goes over budget?
The loan amount is normally fixed, so overruns come out of your own pocket unless the lender agrees to a change. This is the main reason to carry a contingency in the budget.
Can I be my own general contractor?
Some lenders offer owner-builder construction loans, but many require a licensed builder. Requirements vary by lender and by state.
Disclaimer: This calculator is for education and planning only and is not financial advice. Your actual payment depends on your credit, loan type, and the rate you lock, and on property taxes and insurance where you live. Ask your lender for a Loan Estimate before you commit.
What calculator should we build next?
Tell us what you wish you could figure out. We read every idea and add new calculators regularly.