Work out construction draw interest instantly with clear inputs, formula shown and shareable results.
Interest during construction accrues on the drawn balance, not the whole facility, so the average outstanding balance is what matters. On an evenly spent programme that average is about half the facility, which is why interest during construction is usually roughly a quarter of the headline annual rate applied to the full amount.
Interest during construction
Interest = facility x average drawn share x annual rate x months / 12
Interest = facility x average drawn share x annual rate x months / 12. Interest during construction accrues on the drawn balance, not the whole facility, so the average outstanding balance is what matters.
Accounting standards generally require interest directly attributable to constructing a qualifying asset to be capitalised into its cost rather than expensed.
This calculator takes 4 inputs: Total amount drawn, Annual interest rate, Construction period, Average balance drawn. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.