Model staged funding, interest-only periods, and permanent conversion. Review balances, interest, fees, and draw timing. Build smarter borrowing plans with clear month-by-month project visibility.
Use the fields below to model approved proceeds, staged draws, interest behavior, and optional permanent conversion.
This sample scenario shows one possible twelve-month build with staged disbursements and later conversion to a permanent mortgage.
| Item | Example value |
|---|---|
| Approved loan amount | $450,000.00 |
| Total project cost | $600,000.00 |
| Borrower equity | $150,000.00 |
| Construction rate | 8.25% |
| Construction term | 12 months |
| Origination fee | 1.00% |
| Inspection fee per draw | $125.00 |
| Interest handling | Use interest reserve first |
| Permanent rate | 6.75% |
| Permanent amortization | 360 months |
Monthly construction interest uses an average balance approach, assuming new disbursements and financed fees are outstanding for half of the month.
1. Monthly construction rate
Monthly Rate = Annual Construction Rate ÷ 12
2. Average balance for monthly interest
Average Balance = Opening Balance + (Monthly Draws + Monthly Fees) ÷ 2
3. Monthly construction interest
Construction Interest = Average Balance × Monthly Rate
4. Ending construction balance
Ending Balance = Opening Balance + Draws + Fees + Capitalized Interest
5. Available credit
Available Credit = Approved Loan Amount − Ending Balance
6. Loan-to-cost ratio
LTC = Approved Loan Amount ÷ Total Project Cost × 100
7. Permanent payment after conversion
Payment = P × [r ÷ (1 − (1 + r)−n)]
In the permanent payment formula, P is the balance at conversion, r is the monthly permanent rate, and n is the amortization months.
It estimates monthly draws, financed fees, accrued interest, borrower payments, reserve usage, ending balances, and optional permanent loan payments after construction ends.
Construction draws rarely remain outstanding for a full month. Using an average balance offers a practical estimate when funds are disbursed partway through each period.
Reserve-paid interest consumes a separate reserve account first. Capitalized interest is added directly to the loan balance, increasing the amount owed at payoff or conversion.
Yes. You can enter several draw rows with the same month number. The calculator combines them when building the monthly schedule.
This model treats financed origination and closing costs as part of the funded balance. Keep the committed amount high enough to cover both draws and financed charges.
Available credit shows the approved commitment minus the ending balance for that month. Negative amounts suggest an estimated funding gap or under-sized commitment.
Use it when the short-term construction facility converts into a standard amortizing mortgage after completion, instead of requiring a full balloon payoff.
No. It is a planning model for estimating cash flow and timing. Final lender documents, inspection rules, and legal terms still control the actual loan.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.