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Performance Bond Cost Calculator

Performance bonds guarantee completion. This calculator sizes the premium.

$

Bond premium

$170,000

Premium % of contract

2.00%

Annual equivalent

$85,000

How the math works

Premium scales with contract, rating, and term.

Builder's financial strength is the single biggest driver. Building balance sheet over 3-5 years reduces bond cost 30-50% — often worth the capital discipline.

How to Use

  1. Enter contract amount.
  2. Enter contractor rating.
  3. Enter term years.
  4. Read bond premium.

Frequently Asked Questions

Premium rates?

Strong contractor 0.5-1.0% of contract. Standard 1.0-2.0%. Marginal 2.0-3.5%. Distressed may be 4%+ if bonded at all. Term length adjusts pricing.

Single premium?

Usually paid upfront at bond issuance. Covers entire project term. Some sureties allow annual premium payments on multi-year projects; admin fee added.

Premium refund?

Performance bonds are not refundable on early completion. Payment bonds similar. Cost is one-time; price into contract.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.

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