Construction Loan Conversion Calculator
Construction-to-permanent loans roll the build phase into your end mortgage with one closing. This compares your interest-only construction cost, single closing fees, and total to a two-close alternative.
| Average loan balance during build | — |
| Construction interest paid | — |
| One-time-close fees | — |
| Two-close fees | — |
| Total construction-phase cost (one-close) | — |
| Total construction-phase cost (two-close) | — |
| Savings using one-time-close | — |
Construction-to-permanent (CTP) loans use a single closing for the build phase and end mortgage. The lender disburses interest-only draws during build, then converts to your permanent mortgage when complete. The alternative is two separate loans with two sets of closing costs.
How CTP Loans Work
One-time close means you sign once at the start with a permanent rate locked. During the build (6-18 months), the lender funds the builder via draws. You pay interest-only on the drawn balance. At completion the loan converts to your standard 30-year (or other) amortization automatically.
Interest-Only Build Phase
Interest is charged only on the funds drawn so far. Average balance during build is roughly half the final loan, so 12-month build interest ≈ (loan ÷ 2) × rate. Higher build rates (8%+) make the build phase costly.
Rate Lock at Conversion
CTP loans usually let you lock the permanent rate at application, with an extended lock fee. If market rates drop during build, you may have a one-time float-down option per lender. Confirm float-down terms in writing.
CTP vs Two-Close
Two-close = construction-only loan from builder bank, then refinance at completion. Cheaper if construction rates locally are much lower. CTP wins on simplicity, single underwrite, and locked end rate per HUD and CFPB guidance.
Last updated May 2026. Sources: CFPB Construction Loans, HUD 203(k).