🏗️ Construction to Permanent Loan Calculator One-Time Close
Estimate interest-only construction payments and permanent mortgage payments for C2P loans
📋 What is a Construction to Permanent Loan?
A Construction to Permanent (C2P) loan combines construction financing and permanent mortgage into a single loan with one closing. During construction, you pay interest only on the amount drawn. After completion, the loan converts to a standard mortgage with principal and interest payments.
🏦 Loan Details
📊 Construction Draw Schedule
Interest is charged only on the amount drawn to date. Adjust the draw percentages to match your construction timeline.
Month 1-2 (Foundation):
15%
Month 3-4 (Framing):
20%
Month 5-6 (Rough-ins):
25%
Month 7-8 (Finishes):
20%
Month 9-10 (Final):
15%
Month 11-12 (Close-out):
5%
💡 Total: 100% — Draw percentages should total 100%
Construction to Permanent Loan Summary
🏠 Total Project Cost
$500,000
💰 Loan Amount
$400,000
💵 Down Payment Required
$100,000
🏗️ CONSTRUCTION PHASE (Interest Only)
Average Outstanding Balance
$260,000
Monthly Interest Payment
$1,408
Total Construction Interest
$16,896
🏠 PERMANENT PHASE (Principal + Interest)
Monthly P&I Payment
$2,463
Monthly Taxes & Insurance
$542
Total Monthly Payment
$3,005
📋 Full Cost Breakdown
Construction Loan Amount:
$400,000
Origination Fees (1%):
$4,000
Total Construction Interest:
$16,896
Closing Costs (estimate):
$6,000
Total Cash Needed at Closing:
$126,896
📊 Draw Schedule & Interest Calculation
| Period | Draw % | Draw Amount | Cumulative Drawn | Monthly Interest |
|---|
💡 Important Notes: This calculator assumes equal draws each month within each phase. Actual draw schedules vary by lender. Interest during construction is calculated on the average outstanding balance. Some lenders may require interest reserves or additional fees. PMI may apply if down payment is less than 20%.
Frequently Asked Questions
What is a construction to permanent loan?
A construction to permanent loan (C2P) is a single loan that covers both the construction phase and the permanent mortgage. During construction, you pay interest only on funds drawn. After completion, the loan converts to a standard mortgage with principal and interest payments.
How are interest payments calculated during construction?
During construction, you pay interest only on the amount drawn so far. Interest is calculated daily on the outstanding balance. Payments are typically monthly and only cover interest, not principal. Rates are often variable during construction.
What's the difference between a C2P loan and a separate construction loan?
A C2P loan requires one closing, saving thousands in closing costs. Separate loans require two closings (construction loan then permanent mortgage) with two sets of fees. C2P loans also have lower risk if rates rise during construction.
What are typical down payment requirements for C2P loans?
Conventional C2P loans typically require 20-25% down. FHA C2P loans require 3.5% down. VA C2P loans offer 0% down for eligible veterans. USDA C2P loans offer 0% down in rural areas. Down payment is based on total project cost (land + construction).
Can I lock my interest rate during construction?
Most C2P loans allow you to lock the permanent rate at closing for up to 12-18 months. Some offer floating rates during construction with conversion at completion. Rate lock options vary by lender and market conditions.
What happens if construction takes longer than expected?
Most C2P loans have a construction period of 12-18 months. If construction exceeds this timeline, you may need an extension, which can incur additional fees. Some lenders allow extensions with proof of progress and payment of additional interest reserves.