Construction Loan Rates and Terms in Arizona
In 2025, Arizona construction loan rates average 7-9% during the build phase, with terms of 6-18 months. Upon completion, they convert to permanent loans at 6-8%. Fees include 1-3% origination, draw fees, and closing costs.
Rates vary by lender, credit, and project. Loan amounts based on completed value. This guide compares options based on data from NerdWallet and U.S. Bank.
Factors like prime rate and your DTI influence final terms—consult for personalized quotes in areas like mesa-az or chandler-az.
Rates and Terms at a Glance
| Aspect | Typical Range | Notes |
|---|---|---|
| Construction Phase Rate | 7-9% | Interest-only on drawn funds |
| Permanent Rate | 6-8% | After conversion |
| Term Length | 6-18 months build | Then 15-30 years permanent |
| Fees | 1-3% | Origination, draws, closing |
| Loan Amount | Up to $1M+ | Based on completed value |
| Prepayment Penalty | Varies | Check lender |
Compare Lender Types
Conventional Lenders
Rates 7-8%, terms 12 months build.
- • For primary residences
- • Fees 1-2%
- • Strict approval
Government-Backed
Rates 6-7%, terms flexible.
- • FHA, VA, USDA options
- • Lower down payment
- • For eligible borrowers
Factors Affecting Rates & Terms
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Credit Score
Higher scores lower rates.
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Project Size
Larger projects may have better terms.
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Market Conditions
Rates fluctuate with economy.
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