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Construction loan rates: how investor pricing works
What sets the rate on an investor construction loan, how the cost adds up during a build, and how to get your own pricing in minutes.
Get my termsNew construction loansHow are construction loan rates set?
Short answer: bank construction loans for people building their own home are priced close to mortgage rates but need a big down payment and a track record. Investor construction loans come from private lenders and are priced on the deal: your credit, your experience, the leverage and the margin between total cost and the sale price when finished. They are usually interest-only, with points paid at closing. To see your pricing, send your deal and a loan officer sends your terms. We fund 90% of your lot and build budget with no building experience required.
Get my terms: enter your lot price, build budget and sale price, send the deal, and a loan officer sends your pricing.
See your terms in seconds
Your loan amount shows as you type. Send the deal and a loan officer follows up.
Estimate only. Loan amount is 90% of lot price plus build budget. Business-purpose loans on investment property, not homes you will live in.
Bank vs private construction loans
| Bank construction loan | Private investor construction loan | |
|---|---|---|
| Who it is for | Homeowners or builders with a track record | Investors and first-time builders |
| Down payment | Often 20% to 25% | 10% with us |
| Approval | Income, debt and history | The deal, credit and cash |
| Speed | Weeks to months | Faster |
| Pricing | Closer to mortgage rates | Higher, priced per deal |
Banks charge less but ask for more. Most private lenders still want two or three finished builds; we do not.
How the cost adds up
- Interest: usually interest-only during the build, paid monthly
- Points: a one-time fee at closing, as a percentage of the loan
- Lender fees: processing or underwriting
- Time: every extra month of building adds interest
Size your loan in the construction loan calculator, then send the deal for your pricing.
What moves your construction loan rate
- Credit score: higher scores get better pricing. See construction loan credit score.
- Experience: builders with finished projects often get better terms, but you can start with none.
- Leverage: how much of the lot and build the lender funds.
- The deal: the margin between your total cost and the sale price when finished.
- Location: we lend in Texas and Florida.
Rate is only part of the cost
Compare the full cost: rate, points, fees, how much cash you must bring and how fast the lender funds draws. A lower rate that needs 25% down can tie up far more of your cash than a loan that needs 10%. See construction loan closing costs.
Questions builders ask
Straight answers about construction loan rates.
What are your construction loan rates?
Pricing depends on the deal, your credit and your experience. Send your deal using the form on this page and a loan officer sends your terms.
Are construction loan rates higher than mortgage rates?
Yes. Construction loans are short-term and riskier for the lender than a mortgage on a finished home.
Are construction loans interest-only?
Most investor construction loans are. You pay interest during the build and pay off the loan when the home sells or is refinanced.
How fast can I get pricing?
Your loan amount shows as you type. Send the deal and a loan officer follows up with your terms.
Do I need experience?
No. We lend to first-time builders.
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