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New Construction Loan Calculator for Real Estate Investors

Our advanced new construction calculator let’s you calculate costs by each stage of the construction.

Construction Loan Calculator Reset
Fixed Price Building Contract Price (inc. GST)
Owner Contribution
Loan Amount Required $400,000.00
Interest Rate
Loan Required Number of Days Drawdown Amount Current Interest Cumulative Interest
Base Stage
$25,000.00 $0 $0
Frame Stage
$75,000.00 $82.19 $82.19
Lockup Stage
$125,000.00 $616.44 $698.63
Fixing Stage
$125,000.00 $1,386.99 $2,085.62
$50,000.00 $863.01 $2,948.63
Total 80% 250 $400,000.00

Are you a property investor looking to venture into new construction projects? A new construction loan can help bring your real estate aspirations to life. This specialized financing option supports the construction of brand-new properties from the ground up, providing you with the necessary funds to cover construction costs, materials, and labor.

A new construction loan calculator can be helpful when working on a real estate project. This online resource allows investors to estimate potential loan amounts, interest rates, and repayment terms, helping them plan and budget for their projects more effectively. By inputting key financial details, investors can gain insights into the feasibility of their projects and ensure they have a clear understanding of the financial commitment involved.

new construction loan calculator

How to Use Fairmount Funding's New Construction Loan Calculator

By utilizing Fairmount Funding’s new construction loan calculator, property investors can make informed decisions about their construction projects. To do that, you need to follow these steps:

  1. Enter Project Details. Begin by inputting essential project details. This typically includes the building contract price, equity, and interest rate. Be as accurate as possible in providing these figures to ensure the calculator’s accuracy in generating estimates.

  2. Include Financing Information. Next, enter information related to financing. This might involve specifying how much of the loan you will need for various stages of the construction. These details will impact the overall cost of borrowing, and plugging them into the calculator lets you better understand the financial implications of your new construction loan.

  3. Review and Adjust. Fairmount Funding’s new construction loan calculator will automatically display how much loan you will need, the drawdown amount per construction stage, and the cumulative interest of the dropdown amount. You can adjust various inputs if the initial results do not align with your budget or expectations.

While the new construction loan calculator is an excellent tool, consulting with a financial advisor or mortgage expert is always prudent. They can offer personalized guidance based on your financial situation and construction project goals.

Understanding New Home Construction Loan Calculator Terms

  • Fixed Price Building Contract Price: It refers to the agreed-upon total cost between the property owner and the construction company for building a new property. In this type of contract, the builder commits to completing the construction for a specific, fixed amount. It provides certainty to the owner regarding the project’s cost, protecting them from unexpected cost overruns during construction.

  • Owner Contribution: This represents your direct investment into the new construction project. It is usually paid upfront to cover a portion of the total construction cost, while the new construction loan is used to finance the remaining cost of the project.

  • Interest Rate: Expressed as a percentage, the interest rate is the cost of borrowing money from the lender. It is the amount you pay in addition to the principal loan amount. It can be fixed or variable, depending on the loan terms.

  • Drawdown Amount: Rather than disbursing the entire loan amount upfront, the lender releases funds in installments. This is called “drawdowns,” and the amount is based on the completion of pre-defined milestones or stages of construction.

  • Cumulative Interest: It represents the total interest your new construction loan has accrued over time. As you make periodic interest payments or as interest accrues and compounds, the cumulative interest steadily increases until the loan is fully paid off.

What are the benefits of using a new construction home loan calculator?

A new construction home loan calculator is a valuable tool for property investors and homebuyers. It offers financial insights, enhances decision-making capabilities, and promotes better financial planning, all essential for successful construction projects and a smooth loan application process.

  • Time-Saving. Instead of manually performing complex financial calculations, the calculator provides quick and accurate results in seconds, saving borrowers valuable time and effort.

  • Financial Planning. A new construction home loan calculator allows users to estimate their potential loan amount, monthly payments, and overall financing costs. It helps create a comprehensive financial plan, ensuring borrowers have a clear understanding of their budget and can make informed decisions about the feasibility of their construction projects.

  • Comparison Shopping. Using the calculator, borrowers can compare different loan scenarios and interest rates from various lenders. This empowers them to make well-informed choices, selecting the most suitable loan option that aligns with their financial goals and construction project requirements.

  • Avoiding Surprises. The calculator’s estimates help borrowers anticipate the financial commitments associated with their loans. It reduces the likelihood of unexpected financial surprises during the construction process, allowing them to plan and manage their funds more effectively.

  • Pre-Approval Assessment. Before applying for a new construction home loan, borrowers can use the calculator to assess if they are eligible for pre-approval. Doing so streamlines the loan application process and gives borrowers a better understanding of the loan amount they can expect to be approved for.

Things to Consider When Using a New Construction Loan Payment Calculator

When lenders assess new construction loan borrowers, they typically consider several factors to determine the client’s creditworthiness and the viability of the construction project. Here are some of the primary requirements and considerations that lenders look into:

  1. Credit Score. A strong credit score is crucial when applying for a new construction loan. It is common for lenders to favor borrowers with good credit history and a score of 680 or higher. That is because a higher credit score entails a lower risk for the lender and may lead to more favorable loan terms.

  2. Down Payment. Lenders often require a significant down payment for new construction loans, typically ranging from 20% to 30% of the total project cost. A more substantial down payment demonstrates the borrower’s commitment to the project.

  3. Construction Experience. Lenders may favor borrowers with prior experience in real estate construction or development. Having a track record of successful projects can give lenders confidence in the client’s ability to manage the construction process and complete the project on time and within budget.

  4. Detailed Construction Plans. Borrowers are expected to provide comprehensive construction plans. This includes the project’s architectural designs, cost estimates, and a timeline for project completion. A well-thought-out construction plan demonstrates their preparedness and commitment to the project.

  5. Appraisal and Collateral. The lender often conducts an appraisal to assess the value of the completed property. The property is a loan collateral, so lenders will want to ensure that the loan amount aligns with the property’s estimated value.

  6. Exit Strategy. Lenders will inquire about the borrower’s exit strategy for the new construction loan. This could involve plans to sell the property, refinance the loan, or lease it out after completion.

  7. Reserve Funds. Some lenders may require borrowers to have reserve funds or cash reserves to cover unexpected expenses during the construction process.

Each lender has specific criteria and considerations. Hence, you must discuss your circumstances to understand the requirements for obtaining a new construction loan. Being well-prepared and meeting these criteria can significantly increase the chances of securing financing for a successful construction project.

New Construction Loan Calculator FAQs

How can I best use my new construction loan?

A new construction loan is a specialized financing option meant to fund building a new property. To best use your new construction loan, plan your construction budget, closely monitor its progress, and stick to your construction plan.

What does a construction loan cover?

A construction loan often covers the costs of building a new property from the ground up. This includes land acquisition, construction costs, and interest payments.

Can I use the excess fund from my new construction loan for home furnishings?

New construction loans are usually meant to cover construction costs and related expenses. While some lenders may offer limited flexibility in how the funds are used, it is essential to check with your specific lender regarding any potential restrictions.

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