Draw-based interest
Measure the cost of money only while it is actually outstanding
A construction commitment may be large, but the entire commitment is usually not advanced on the first day. This calculator therefore divides the loan into date intervals and uses the outstanding balance that existed during each interval.
The same interval method is used for an optional unused-commitment fee, except the base is the undrawn amount instead of the outstanding principal.
Average outstanding balance
The calculator also computes a day-weighted average balance. That is useful for understanding how much of the commitment was actually in use during the period rather than looking only at the final balance.
Need a standard amortization schedule after construction?
When the construction phase converts into a permanent amortizing loan, use Amortization Pro to create the full principal-and-interest schedule.