Construction Loan Progress Payments Calculator
Estimate interest charged during a construction loan's build period based on staged progress payment drawdowns to your builder.
Your results
Calculation breakdown
- Staged interest
- Interest accrues only on funds drawn so far at each stage, compounding as more stages are drawn
Worked example
A $450,000 build over 9 months at 6.5% accrues roughly $9,800 in interest across the staged drawdowns before the loan converts to principal and interest.
Assumptions
- Uses illustrative stage percentages (slab, frame, lock-up, fixing, completion); confirm the actual percentages in your building contract.
- Assumes even spacing of stages across the build period.
How this calculator works
This calculator estimates the interest-only cost during a construction loan's build phase, applying your chosen progress payment percentages in stages and calculating interest on the growing drawn balance until the loan converts to principal and interest.
Frequently asked questions
Why is interest only charged on the amount drawn down?
Construction loans release funds in stages as building milestones are completed, so interest accrues only on the portion drawn so far, not the full approved loan amount.
What are typical progress payment stages?
Common stages include slab, frame, lock-up, fixing and completion, each releasing a percentage of the total loan; check your building contract for the exact percentages used.
What happens after construction finishes?
Once the final drawdown is made, the loan typically converts to a standard principal and interest mortgage; this calculator only covers the interest-only build period.
Results are estimates only and are not financial, tax, legal or credit advice.