Compare dutch (interest on the full loan) versus non-dutch (interest as-drawn) side by side — monthly payment, total interest, and all-in cost, so you know what the fine print really costs.
Estimates for informational purposes only — not a loan offer, commitment, financial advice, or a lending decision. Program limits shown are illustrative and vary by lender.
Bridge and rehab loans hold back the renovation money and release it in draws. The question is when the meter starts. Dutch interest runs on the whole loan from closing — including money still sitting in the holdback. Non-dutch runs only on what you've drawn. The slower you draw, the more dutch costs you relative to as-drawn.
Two term sheets can quote the same rate and points and still cost meaningfully different amounts because of this one line. Estimate your average drawn percentage honestly — a heavy back-loaded rehab draws late, which widens the gap. When you compare offers, put the all-in cost side by side, not just the headline rate.
With dutch interest, you pay interest on the entire loan — including the undrawn rehab holdback — from day one. It's simpler for the lender and more expensive for you, because you're paying for money you haven't received yet.
Non-dutch charges interest only on funds actually disbursed. The rehab holdback accrues interest as you draw it, so your average balance — and your interest bill — is lower.
It depends on the holdback size and how slowly you draw it. This calculator estimates the difference from your average drawn percentage. On a typical rehab loan it's often a few thousand dollars over the term.