ADU Loan Calculator USA

Introduction

Accessory Dwelling Units (ADUs) offer homeowners the chance to add living space, increase property value, and generate rental income. However, financing an ADU involves understanding construction costs, interest rates, loan terms, and monthly payments. Our ADU Loan Calculator simplifies this process by estimating your loan details based on total cost, down payment, APR, and term length. Whether you plan to build a backyard cottage or attach an in-law suite, this tool provides clarity on financing options.

How to Use This Calculator

1. Enter the Total ADU Cost, including hard and soft costs.
2. Specify your Down Payment amount.
3. Input the Interest Rate (APR) for your loan.
4. Select your Loan Term in years.
5. Click Calculate Loan to view monthly payment, total interest, and overall loan cost.

Calculation Details

We use the standard amortization formula to calculate monthly payments:

P = (r × (C - D)) / [1 - (1 + r)^(-n)]

Where:

• P = monthly payment
• r = monthly interest rate (APR/12)
• C = total ADU cost
• D = down payment
• n = total payments (term × 12)

Practical Applications

• Budgeting: Understand your monthly obligations before construction.
• Financing Planning: Compare loan terms to minimize interest costs.
• Rental Analysis: Ensure rental income covers loan payments.

Frequently Asked Questions

1. What ADU costs should I include?

Include hard costs (materials, labor) and soft costs (permits, design fees, inspections). For average data, see NAHB.

2. How much down payment is recommended?

Typically 10–20% of total cost. Higher down payments reduce interest and lower monthly payments.

3. What loan term is best?

Longer terms lower payments but increase total interest. Shorter terms save interest but raise payments.

4. Can rental income cover the loan?

Estimate expected rent and compare to monthly payment. Aim for rent to exceed payment for positive cash flow.

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6. Disclaimer

This calculator provides estimates for informational purposes. Consult financial advisors and lenders for precise quotes.