Calculate your new construction loan or refinance options below. Input your details and hit Calculate to view your loan terms and an interactive graph. Additionally, explore the detailed payment schedule in the table below, and download the data as an Excel or CSV file for your records.
Step 1: Select your loan type (Purchase or Refinance) Step 2: Enter the cost of land and construction Step 3: Provide loan and mortgage details Step 4: Calculate your results
The online construction loan calculator provided by busybusy is a tool designed for informational purposes only. While we strive to ensure accuracy, we do not guarantee the reliability or suitability of the results for any specific purpose. Users are solely responsible for the interpretation and application of the calculated information. busybusy disclaims any liability for actions taken or decisions made based on the results obtained from the calculator. It is recommended to consult with a qualified professional for precise construction calculations and decisions. By using this calculator, you acknowledge and accept these terms.
Building your dream home from the ground up can be an exciting yet daunting process. While construction loans make it possible, determining what you can realistically afford requires some careful calculations. That’s where a construction loan affordability calculator comes in handy!
In this comprehensive guide, I’ll walk you through everything you need to know about using an affordability calculator to plan your home construction project.
What is a Construction Loan Affordability Calculator?
A construction loan affordability calculator is an online tool that allows you to estimate what size construction loan you can qualify for based on your income, debts, expected home value, and other financial factors.
It works similarly to a regular mortgage affordability calculator, but with some key adjustments to account for the unique nature of construction loans. The main differences are:

It calculates the construction phase separately from the permanent mortgage This allows you to estimate interestonly payments during construction and principal + interest payments after

It factors in the total build cost, not just a purchase price. This includes cost of land, materials, labor, fees, etc.

It accounts for construction loan specifics like higher rates, interestonly periods, draw schedules, and loantovalue ratios.
Why Use a Construction Loan Affordability Calculator?
Trying to mentally estimate what size construction loan you can afford is tricky. A construction affordability calculator simplifies the process and helps you:

Get an initial estimate of your affordable loan amount and payments before applying.

Determine if building new is financially feasible or if an existing home is a better fit.

Compare different construction scenarios to optimize your budget and timeline.

Have realistic expectations when meeting with lenders

Avoid getting in over your head financially. Construction delays and overages are common, so it’s best to be conservative.
How to Use a Construction Affordability Calculator

Enter your target location. This allows the calculator to factor in average construction costs for your area.

Input your total estimated build cost. Be comprehensive here—land, materials, labor, fees, contingencies etc. Get quotes from builders.

Enter your down payment amount. Lenders usually require 2025% down for construction loans.

Input your credit score so the calculator can estimate your rate.

Enter your income, debts, and other financial details. This is used to calculate your debttoincome ratio.

Adjust parameters like loan term, construction period, etc. to model different scenarios.

View results. The calculator estimates your affordable loan amount, payments, fees, etc. Tweak inputs if needed until you reach a comfortable scenario.
What to Look for in Your Construction Affordability Calculator Results
Key outputs to review when using a construction affordability calculator include:

Affordable loan amount – Given your inputs, this is the maximum recommended construction loan amount.

Construction phase payments – The interestonly payments during the build period.

Permanent phase payment – Monthly principal + interest payment once the home is completed.

Total fees – Upfront costs like origination fees and points.

Interest rates – Estimated construction and permanent loan rates based on current market rates.

Minimum income required – The total monthly income needed to qualify for the calculated loan amount.
Top Construction Affordability Calculators to Try
Now that you know how construction affordability calculators work, here are two top options to try when planning your build:

MortgageCalculator.org – Their construction loan calculator is completely customizable and provides detailed reports.

CasaPlorer – This construction loan calculator is very userfriendly and factors in current rates.
Both tools are completely free to use and don’t require signing up. I recommend trying both to compare results.
A Helpful First Step Before Applying
Obtaining financing for a major construction project can be daunting. But starting with a construction loan affordability calculator simplifies the process and sets you up for success.
By spending just a few minutes inputting your financial details, you can get a realistic estimate of what you can qualify for and comfortably afford. This takes much of the guesswork out of building your dream home!
Try out one of the recommended construction affordability calculators today. And remember to be conservative with your inputs and leave room for unexpected overages. This will ensure you start off your exciting home build on the right financial footing.
Construction Loan Calculator Definitions
Refinance: The process of replacing an existing construction loan with a new one, often to secure more favorable terms or to convert the loan into a permanent mortgage.
Remaining balance: The amount of the construction loan or mortgage that is still unpaid, which decreases as you make payments.
Cost of construction: The total expense associated with building or renovating a property, including materials, labor, and other projectrelated costs.
Down payment: The initial payment made by the borrower when obtaining a construction loan or mortgage, usually a percentage of the total project cost.
Loan interest rate: The percentage at which the borrowed money accrues interest, impacting the overall cost of the construction loan or mortgage.
Length of project: The estimated duration for completing the construction or renovation project, which can influence the loan terms and interest rates.
Mortgage: A longterm loan used to finance the purchase or refinancing of a property, typically repaid in monthly installments.
Mortgage rate: The interest rate applied to a mortgage loan, influencing the monthly payments and overall cost.
Mortgage term: The predetermined time the borrower will repay the mortgage, such as 15, 20, or 30 years.
Monthly mortgage payment: The regular, usually monthly, installment paid by the borrower to cover the mortgage’s principal and interest.
First interestonly payment: The initial mortgage payment in which only interest is paid, without reducing the principal balance, standard in construction loans during the project’s development phase.
Initial construction loan: The loan obtained to finance the construction or renovation of a property before converting it into a permanent mortgage.
Last interestonly payment: The final interestonly payment made on a construction loan before transitioning to a traditional mortgage payment structure.
Initial mortgage balance: The outstanding loan amount at the beginning of the mortgage term, usually equal to the original loan amount.
Construction loan amortization: The process of gradually paying off the construction loan by making regular payments, which include both principal and interest, until the loan is fully repaid.
Did you see “Download Excel” or “Download CSV”? If you would like a more detailed report hit “Download Excel” or “Download CSV” to get a detailed report in a spreadsheet format.
Advantages of a Construction Loan Calculator for Construction Companies
Construction companies can swiftly estimate the cost of new construction loans or refinancing options. This tool enables precise budgeting, helping companies ensure they are financially prepared for their construction projects.
With this calculator, you can gain insights into your loan terms and monthly payments. It empowers you to make informed financial decisions and optimize your project’s budget, potentially saving costs in the long run.
Construction Loans: What They Are and How They Work (IN DETAIL)
FAQ
How to calculate construction loan amount?
How do you calculate loan affordability?
What is the debt to income ratio required for a construction loan?
What is the minimum FICO score for a construction loan?
What is a construction loan calculator?
Our construction loan calculator helps you estimate the financials of your construction project. It can determine your monthly payments during your home construction project, and the monthly mortgage payments after the construction is done. It can also estimate the FHA, USDA, and VA construction loans. How Do You Calculate a Construction Loan?
How do you calculate interest on a construction loan?
How to Calculate Interest Only Payments of a Home Construction Loan During Construction Aconstruction loan’s payments are based on the loan amount drawn during construction. If Hard Money or Fix and Flip loan, interest is charged on the entire loan amount.
What is a construction loan calculator with amortization schedule?
Construction Loan Calculator with amortization schedule to estimate the monthly payment for your construction loan. Construction Loan Calculator with amortization schedule to estimate the monthly payment for your construction loan.
What is the average interest rate on a construction loan?
Adjustable Interest Rates: Another crucial aspect is that construction loans often have adjustable interest rates. These rates can fluctuate as the prime rate changes, impacting the overall cost of borrowing throughout the loan term. As of September 25, 2023, the average construction loan interest rate stands at 7.75%.