Development
Construction draw
What does the money actually cost while the building goes up?
Balances a development budget, sizes the loan against both loan-to-cost and loan-to-stabilised-value, then runs an S-curve draw schedule so the capitalised interest is calculated on funds drawn rather than on the face amount.
Every default here is an illustrative figure chosen to be plausible. Nothing on this page is a rate sheet, a quote or an offer, and no licence or NMLS number exists to attach to it.
Total project cost——
Loan——
Equity required—Funded before the first draw
Capitalised interest——
The draw curve
IllustrativeDraws follow an S-curve: slow mobilisation, a fast middle, a long closeout. Interest is charged only on the shaded outstanding balance, which is why a construction loan costs a fraction of what its face amount suggests.
Monthly draw Outstanding balance
Draw schedule
| Month | Draw | Cumulative drawn | Interest | Outstanding |
|---|
Budget and sizing
| Line | Amount | % of cost |
|---|
—
Assumptions on this page
- Land funds at closing from the loan up to the loan amount; everything else draws against the S-curve.
- Interest is capitalised — added to the outstanding balance monthly — which is how a construction loan normally works and why the balance exceeds the drawn total.
- The loan is the lesser of the loan-to-cost and loan-to-stabilised-value tests, both of which are applied here.
- No retainage, no lien-waiver timing and no inspection lag are modelled; all three delay real draws.
- Illustrative arithmetic on a demonstration site. It is not a budget, a bid or a commitment.
Other calculators
- Start hereLoan sizingHow large a loan does this property actually support — and which test is stopping it?
- CoverageDSCR & debt yieldDoes the income cover the debt, and by how much?
- ScheduleAmortisation & balloonWhat is the payment, and what is still owed on the maturity date?
- ValuationCap rate & valueWhat is this income worth, and what does the price imply?