Financing · Monthly Payment Math
What does an ADU build actually cost per month?
A $200,000 Boise ADU on ICCU's 6.25% HELOC runs about $1,042/month interest-only. Drop in your numbers below — pick HELOC, construction, or cash-out refi and see the real Boise monthly carry.
What the numbers actually mean
A mortgage payment has two moving parts: how much you pay each month, and how much of that payment is interest versus principal. The calculator above surfaces four numbers — monthly payment, loan principal, total interest over the term, and first-year interest — so you can see both the cash-flow picture and the long-run cost of the loan side by side.
How monthly payment is calculated
For a fully amortizing loan (construction-to-perm, cash-out refi), the monthly payment formula is M = P[r(1+r)^n] / [(1+r)^n − 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12), and n is the total number of payments (years × 12). At 6.75% on a $160,000 construction-loan principal over 30 years, that math lands at roughly $1,038/month — every payment is the same dollar figure, but the split between principal and interest shifts over time. Early years are interest-heavy; the back half of the loan is principal-heavy.
How HELOC interest-only payments work
HELOCs during the draw period (typically 10 years on Idaho credit-union products) charge interest only on the outstanding balance — no principal reduction. The math is simple: balance × annual rate ÷ 12. A $200,000 HELOC draw at 6.25% runs $200,000 × 0.0625 ÷ 12 = $1,042/month interest-only. The headline number is low, but you're not building any equity in the ADU itself with those payments. When the draw period ends, the balance amortizes (or balloons) — most borrowers refinance or sell before that conversion.
Total interest over the term
Total interest is the headline number that determines whether the loan is a good deal in absolute terms. A $160,000 loan at 6.75% over 30 years pays roughly $213,600 in total interest — meaningfully more than the original principal. Drop to a 15-year term at the same rate and total interest falls to about $94,800, even though the monthly payment climbs. The calculator surfaces both so you can size the trade-off.
What we assumed (every default, on one page)
Every default rate, term, and assumption the calculator uses is listed below with the source. Change any input in the tool above and the math shifts — these defaults stay published so the scenario is auditable.
| Assumption | Default | Source / rationale |
|---|---|---|
| HELOC rate (default) | 6.25% | Idaho Central Credit Union published HELOC rate, May 2026. Lowest publicly listed Idaho rate at capture. MACU's HELOC sits at 7.25%+. ICCU offers interest-only payments during the 10-year draw period. |
| Construction loan rate (default) | 6.75% | Mountain America Credit Union published construction-loan rate, May 2026 (7.088% APR). MACU is one of the few Idaho-serving lenders publishing a construction-specific rate; Zions Bank and WaFd offer construction-to-perm but require direct quote. |
| Cash-out refi rate (default) | ~7.00% | Bankrate Idaho 30-year refinance rate is 6.69% (May 2026); cash-out is typically priced 0.25–0.50% above straight refi. The 7.00% default is the floor — your actual cash-out rate depends on equity, credit, and lender pricing on the day. |
| Loan term | 30 years | Standard amortization for construction-to-perm and cash-out refi. HELOCs typically convert to a 20–30 year amortization after the draw period; we model the interest-only payment as the headline figure because that's what hits your bank account during construction and lease-up. |
| Down payment (default) | 20% (construction + cash-out), 0% (HELOC) | Construction-to-perm and cash-out lenders typically require 20% equity. HELOCs draw against existing primary-home equity — no separate down payment. |
| Refi assumption (construction loan) | Modeled as if refi happens at loan close | Construction-to-perm products lock the rate before construction starts and roll to permanent financing automatically. The calculator treats the construction loan as if it's already converted — you see your post-conversion payment, not the interest-only draw payment during build. |
| Finish per-sqft reference | $340 / $405 / $480 (Essential / Standard / Premium) | Same per-sqft rates used in /cost-calculator and /adu-roi-calculator-boise. Reconciled against Iron Crest Remodel's published $180k–$280k 1BR range and current Boise builder bids. Must stay in sync with the cost calculator. |
What this calculator doesn't model
A four-input tool can't capture every line of a real mortgage statement. The four items below either understate your true monthly cost (tax + insurance, PMI) or hide rate risk (construction draws, balloons). Run a real lender quote against the calculator output before committing.
- Property tax and homeowners insurance escrow — Ada County's effective property tax sits near 0.7% of assessed value; insurance runs $600–$1,200/yr on an ADU. A full PITI payment is meaningfully higher than the P&I number this calculator shows.
- PMI on low-equity scenarios — if your cash-out refi pushes combined LTV above 80%, expect 0.3–1.5% PMI on top of the rate until you build equity back. The calculator doesn't add PMI automatically.
- Rate changes during construction draw — construction-to-perm products lock the rate at close, but standalone construction loans can re-price at conversion. The HELOC line is variable from day one and tracks prime.
- Balloon payments + interest-only resets — short-term construction loans and some HELOC products require a balloon or principal payment at the draw-period end. Check your note before assuming you can ride the interest-only payment indefinitely.
Boise ADU mortgage payment — frequently asked
What's the typical Boise ADU loan payment in 2026?
A $200,000 Standard-finish 1BR Kingfisher financed on a HELOC at ICCU's May 2026 rate of 6.25% pencils to about $1,042/month interest-only during the draw period. The same project on a construction-to-perm loan at MACU's 6.75% with 20% down ($160,000 principal, 30-year amortization) lands closer to $1,038/month principal + interest. A cash-out refi at ~7.0% on the full $200,000 with no down payment runs about $1,330/month. The interest-only HELOC payment looks lowest but you're not amortizing the principal — model both ways before committing.
HELOC vs construction loan — which has lower monthly carry?
HELOC almost always wins on raw monthly carry because you're paying interest only during the draw period. Trade-offs: HELOC rates are variable and tied to prime, so the monthly number moves with the Fed. Construction loans lock the rate at close, amortize principal from month one, and require 20% down — higher monthly payment but a fixed schedule, no rate risk, and you're building equity. If you have substantial existing home equity and can absorb rate moves, HELOC is the cheaper carry. If you want certainty and you're a long-hold owner, construction-to-perm is the steadier path.
How does Idaho compare to national mortgage rates?
Idaho tracks the national 30-year fixed mortgage closely — Bankrate shows the Idaho purchase 30-year at 6.88% in May 2026, within a few basis points of the national average. Where Idaho borrowers can save is on credit-union pricing: ICCU's 6.25% HELOC sits below the 6.64% national HELOC average and well below big-bank rates (Aven 7.99%, PNC 8.22%, TD Bank 8.34%). For an ADU build specifically, an Idaho credit union is typically the cheapest path to capital.
Can I deduct ADU loan interest?
Mortgage interest deductibility depends on how the proceeds are used and your overall tax position. Interest on a HELOC or cash-out refi used to substantially improve the home that secures the loan is generally deductible up to the $750,000 combined mortgage cap (post-2017 TCJA rules), subject to itemization. Interest on a HELOC used for general purposes (not home improvement) is not deductible. If you're renting the ADU, mortgage interest, depreciation, and operating expenses flow through as rental property deductions on Schedule E — a different framework entirely. Talk to a CPA; we're not tax advisors.
Should I refinance after the construction loan converts?
Construction-to-perm products usually convert automatically at the rate you locked at close — no separate refinance needed. Standalone construction loans (12–18 month interest-only notes) require refinancing into a permanent mortgage at conversion, and that's where rate environment timing matters. If rates have dropped meaningfully since you locked, refinancing is worth running the math on; standard rule of thumb is a refi pays back if you can drop the rate 75–100 basis points and you'll stay in the property long enough to recoup closing costs (typically 18–24 months at current Idaho closing-cost levels).
Build pricing referenced on this page is based on quotes from Iron Crest Remodel (Idaho contractor license RCE-6681702), BoiseADU's preferred builder partner for the City of Boise pre-approved plan set.
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