Free Financial Tool
ADU Loan Calculator
Estimate your monthly ADU loan payments across the full construction-to-permanent lifecycle. Compare draw schedule assumptions and see LTC/LTV instantly.
Interest-only rate used during the draw period while your ADU is being built. This is sometimes called the draw-period rate.
Rate used after conversion, when principal-and-interest payments begin.
Rate terms explained
Interest rate is the borrowing cost used to compute your payment. APR is broader and usually includes lender fees and certain closing costs.
This calculator uses interest rates for payment math and does not estimate lender-specific APR.
Draw schedule changes your average outstanding balance during construction, so it changes interest-only payments.
Construction draw payment (interest-only)
$744
Permanent mortgage payment (principal + interest)
$1,154
Total interest
$252,856
Total loan cost
$422,856
LTC
77.27%
LTV
20.00%
Timeline
Assumptions
- - Construction payment is modeled as interest-only on average drawn balance.
- - Draw schedule profile: linear.
- - Permanent phase assumes a fixed-rate fully amortized loan.
- - Outputs are estimates and do not include lender fees, taxes, or insurance.
1. Construction phase
Monthly payment is modeled as interest-only on the average drawn balance.
2. Conversion
The model assumes conversion to a fixed-rate amortized mortgage on the remaining principal.
3. Long-term repayment
View permanent monthly payment, total interest, and the total projected loan cost.
ADU loan rates in California: how to use this calculator for real decisions
Use this ADU loan calculator to model construction-phase payments, conversion to a permanent mortgage, and long-term monthly payment scenarios. This helps you compare options before you request formal quotes.
For lender selection, always compare official Loan Estimates side by side. Mortgage pricing can vary by lender and borrower profile even on the same day.
How ADU construction loans work
- Construction financing is often short-term and disbursed in stages (draws).
- During construction, payment structures commonly focus on interest on disbursed funds.
- After completion, many borrowers transition into a permanent mortgage structure.
Source: CFPB construction loan guidance.
How to compare ADU loan offers correctly
- Interest rate and APR are related but not the same metric.
- Principal-and-interest is different from total monthly housing cost.
- Compare lender Loan Estimates using the same assumptions and timeline.
Source: CFPB Loan Estimate explainer.
What affects ADU loan rates and approval outcomes
- Credit profile and debt-to-income ratio.
- Loan-to-value and available down payment or equity.
- Loan type (construction-to-permanent vs home equity product).
- Project scope, draw schedule, and contractor documentation.
- Property valuation and appraisal assumptions.
- Market conditions and lender-specific pricing policies.
ADU financing options: quick comparison
| Option | Common use case | Payment behavior |
|---|---|---|
| Construction-to-permanent | Ground-up ADU build with staged draws | Construction phase + permanent mortgage phase |
| HELOC | Flexible funding against existing equity | Typically revolving draw period, then repayment period |
| Cash-out refinance | Refinance first mortgage to pull project funds | Single mortgage payment after refinance closes |
Educational comparison only. Final structure depends on lender guidelines and underwriting.
Where to check current mortgage-rate context
Use trusted, frequently updated trackers for market context before requesting quotes:
How to get a loan for an ADU: practical checklist
- Build a realistic project budget and draw timeline.
- Estimate multiple payment scenarios in this calculator.
- Collect lender Loan Estimates and compare APR, fees, and terms.
- Confirm lot feasibility and ADU scope before final loan selection.
Next steps: validate your lot with our ADU Backyard Planner and evaluate total project returns with the ADU ROI Calculator.
ADU Loan Calculator FAQ
Key questions about ADU construction financing
An ADU loan is financing used to build an accessory dwelling unit on your property. The most common structure is a construction-to-permanent loan: during construction you usually make interest-only payments on drawn funds, and after completion the loan converts to a standard mortgage with principal-and-interest payments.
Plan financing and feasibility together
After estimating loan payments, validate lot fit and setbacks with our backyard planning tool.
Estimates only. Not a loan offer or financial advice.