Mortgage Construction Perm Conversion Calculator

Construction-to-perm loans roll into permanent mortgage at completion, avoiding second closing.

Construction loan

Permanent rate %

Permanent term years

Modification fee

Alternative refi cost

Permanent monthly P&I

$3,243

Savings vs refi

$6,500

Total interest perm

$667,477

How the math works

Standard mortgage formula at permanent rate. Single-close savings = refi cost − modification fee.

$500k 6.75% 30y = $3,243/mo. Single-close saves $8k − $1.5k = $6,500 vs separate refi.

How to Use

Enter construction loan.
Enter permanent rate %.
Enter permanent term years.
Enter modification fee.
Enter alternative refi cost.
Read permanent monthly p&i.

Frequently Asked Questions

Construction-to-perm structure?

Single-close: one loan funds construction draws + converts to permanent at completion. One closing, one set of fees. Rate locked at origination or modified at conversion. Two-close: separate construction loan, then refi to permanent. More flexibility but second closing cost. Conversion options: rate locked at origination (modification fee at conversion), float-down to current rate at conversion, ARM-to-fixed conversion. Best for owner-occupied custom build with known timeline.

How does this debt analysis fit a workout strategy?

Workout, default, and recapitalization decisions depend on the gap between in-place debt and current asset value. Lenders evaluate cure cost, foreclosure timeline + cost, broker price opinion (BPO), and borrower equity. Borrowers evaluate equity in the property, refinance feasibility, and forbearance economics. This calculator provides one input to that multi-factor decision.

Discounted payoff (DPO) vs forbearance vs deed in lieu?

DPO: lender accepts less than full balance to avoid foreclosure cost, common with non-recourse and underwater assets. Forbearance: payment deferral 6–18 months, balance accrues, useful when value will recover. Deed in lieu: borrower transfers title to lender, faster than foreclosure but lender takes full risk. DPO often best when borrower has new capital + lender wants quick exit.

Special servicing dynamics?

CMBS loans transfer to special servicer at default or maturity default. Special servicer compensation aligns with workout, but timeline is 6–24 months and fees stack ($25–250k+ in costs). Whole-loan and balance-sheet lenders move faster but with less flexibility. Bridge and debt fund lenders most flexible. Time-to-resolution and total friction cost should be weighted in any borrower scenario.