By ADU Scope editorial team · Last verified: October 2026
ADU loan payments on a $150,000 project run from about $1,026 to $3,337 a month in the hypothetical examples below, depending on the rate and the term. A 30-year loan has the lowest payment, while a 5-year loan has the highest payment and the least total interest.
This guide runs the same $150,000 through six loan structures, so you can compare them on equal footing. Importantly, every example is hypothetical, and the market rates are dated as of Oct 1, 2026. Please note that it is general information, not financial or tax advice, and none of it is a lender quote.
How we calculated these ADU loan payments
Every figure uses the standard amortization formula: payment = P × r ÷ (1 − (1 + r)^−n). In this formula, P is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments. Moreover, we ran each result in code and rounded to the cent. However, the figures cover principal and interest only. Real quotes, moreover, add taxes, insurance, fees and sometimes mortgage insurance.
Three kinds of rates appear in the examples:
- 7.28% (30-year) and 6.60% (15-year): Freddie Mac’s Primary Mortgage Market Survey averages, released Oct 1, 2026. Per Freddie Mac, the survey covers conventional, conforming purchase mortgages. Therefore a cash-out loan, a construction loan or a HELOC can price differently.
- 7.00% bank prime rate: the Federal Reserve’s H.15 release, published Oct 5, 2026, for the week ending Oct 2. A variable HELOC rate usually equals an index plus a lender-set margin, according to the CFPB. Our 7.5% HELOC rate is hypothetical: we assumed prime plus a 0.50-point margin.
- 10% and 12%: hypothetical personal loan rates. We chose them to show how rate and term interact, not to predict what a lender will offer.
ADU loan payments side by side
The table below compares five repayment structures on $150,000. Note that the HELOC row shows the repayment phase only. We cover the interest-only phase in the next section.
| Loan type (hypothetical) | Rate | Term | Monthly payment | Total interest |
|---|---|---|---|---|
| 30-year fixed | 7.28% | 30 years | $1,026.32 | $219,475 |
| 15-year fixed | 6.60% | 15 years | $1,314.92 | $86,686 |
| HELOC, repayment phase | 7.5% | 20 years | $1,208.39 | $140,014 |
| Personal loan | 10% | 7 years | $2,490.18 | $59,175 |
| Personal loan | 12% | 5 years | $3,336.67 | $50,200 |
Term drives interest more than rate does
Compare the 30-year loan at 7.28% with the 15-year loan at 6.60%. Here, the rate gap is 0.68 points. As a result, the payment rises by $288.60 a month, and total interest falls by about $132,789.
To see which factor matters most, we also priced a 15-year loan at 7.28%. In that case, the payment would be $1,371.83, and interest would be $96,930. As a result, the shorter term alone saves roughly $122,500, while the lower rate adds about $10,200.
The cheapest loan to carry is rarely the cheapest to own
Notably, the 12% loan has the lowest total interest ($50,200) and the highest payment ($3,336.67). Conversely, the 30-year loan has the opposite profile. In short, a low payment buys flexibility, and a short term buys savings.
The payment starts before the rent does
First, most loans start billing before the ADU can host a tenant. Therefore, your household budget has to carry the full payment during construction and lease-up. For a fuller view of project costs, see our guide on how much an ADU costs in California.
HELOC: ADU loan payments in the draw and repayment phases
A HELOC has two payments, not one. During the draw period you borrow as needed, and some plans allow interest-only payments, per the CFPB. Then repayment begins, and you also pay principal. The CFPB booklet says a lender may set a schedule to repay the full amount, often over 10 or 15 years. The draw length varies by lender, so read your agreement.
Interest-only draw phase
Also, your interest-only payment follows your balance, not your credit limit. Suppose you draw $50,000 at the foundation stage, $50,000 more at framing, and $50,000 at finish. At a hypothetical 7.5%, the payments step up as follows:
| Balance drawn | Interest-only payment at 7.5% | Interest-only payment at 8.5% |
|---|---|---|
| $50,000 | $312.50 | $354.17 |
| $100,000 | $625.00 | $708.33 |
| $150,000 | $937.50 | $1,062.50 |
Repayment phase
When the draw period ends, the payment includes principal. Using the full $150,000 balance, the hypothetical repayment figures are:
| Repayment term | Payment at 7.5% | Payment at 8.5% |
|---|---|---|
| 15 years | $1,390.52 | $1,477.11 |
| 20 years | $1,208.39 | $1,301.73 |
At 7.5% over 20 years, the payment jumps by $270.89 from the interest-only level of $937.50. By contrast, over 15 years the jump is $453.02. So plan for that step before you borrow. In addition, the CFPB warns that some plans require a large balloon payment at the end, and that falling behind could put your home at risk.
Stress-test the rate
Besides, a variable rate can change after you budget it. If the rate rises one point, the interest-only payment on $150,000 climbs by $125.00 a month. The 20-year repayment payment climbs by $93.34. Therefore, recompute your plan at a rate one point above today’s and check that the ADU still cash-flows. Our HELOC for an ADU guide covers the mechanics in more detail.
Personal loan ADU loan payments
First, a personal loan is an installment loan. According to the CFPB, these loans can run from a few months to several years. Also, lenders often price unsecured credit above secured credit, and personal loans often carry shorter terms. Both effects push the payment up, so confirm each with real quotes.
Now look at the hypothetical numbers. For instance, at 10% over 7 years, $150,000 costs $2,490.18 a month. Meanwhile, at 12% over 5 years it costs $3,336.67. For comparison, the 30-year example at 7.28% costs $1,026.32. Total interest is lower on the personal loans, but your cash flow must carry the payment from month one.
When a personal loan can fit
Overall, a smaller scope is where a personal loan works best. For example, a hypothetical $40,000 loan at 10% over 5 years costs $849.88 a month, with $10,993 in total interest. Thus, that payment is manageable for many budgets. A personal loan can also suit a borrower with little home equity who prefers not to add a lien.
Before you apply, ask each lender for:
- the maximum loan amount, because many caps sit below a full ADU budget;
- the APR, not only the rate;
- any origination fee, and whether it comes out of the proceeds;
- any prepayment penalty.
Likewise, do not use a personal loan to cover overruns on a project that another loan already finances. Instead, recompute your total monthly debt first. In practice, stacked loans are how ADU budgets break.
ADU loan payments if you keep a low-rate mortgage
If you already hold a low-rate mortgage, compare your total housing payment, not just the new loan. The existing mortgage below is hypothetical: $300,000 at 3.5% with 25 years left.
| Path (hypothetical) | Total monthly payment, principal and interest |
|---|---|
| Existing mortgage only (baseline) | $1,501.87 |
| Existing mortgage + $150,000 HELOC, interest-only at 7.5% | $2,439.37 |
| Existing mortgage + $150,000 HELOC, 20-year repayment at 7.5% | $2,710.26 |
| Cash-out refinance to $450,000 at 7.28%, 30 years | $3,078.96 |
The refinance row resets the whole balance to a new rate and term, so it costs $368.70 a month more than the HELOC repayment path. The terms differ, however, so total interest also differs. Our comparison of a cash-out refinance vs. a HELOC for an ADU walks through that trade-off.
Can rent cover your ADU loan payments?
In practice, that depends on local rents. A 2021 Terner Center survey of California ADU owners found a median new-ADU rent of $2,000 a month, and a median construction cost of $150,000. The survey is dated and California-specific, so use your own market’s numbers.
At $2,000 a month, rent would exceed the 30-year, 15-year and HELOC repayment payments above. However, it would not cover the 10% or 12% personal loan payments. However, loan payments are only one cost. Subtract property tax changes, insurance, utilities you pay, maintenance and vacancy. For the tax piece, read how an ADU affects property tax in California.
How to run your own ADU loan payments
Follow these steps with real quotes in hand:
- Get the loan amount, rate, term and fees from each lender’s Loan Estimate or written quote.
- Calculate the payment with the formula above, or ask the lender for an amortization schedule.
- For a HELOC, calculate both the interest-only payment (balance × annual rate ÷ 12) and the repayment payment.
- Compute total interest as payment × number of payments − loan amount.
- Rerun everything at a rate one point higher.
For an overview of every option, see our guide on how to finance an ADU.
Frequently asked questions about ADU loan payments
What is a typical monthly payment on a $150,000 ADU loan?
In these hypothetical examples, it runs from $1,026.32 (30-year at 7.28%) to $3,336.67 (5-year at 12%). Ultimately, your rate, term and credit decide the real number.
Should I pick the longest term for the lowest payment?
Not automatically. Typically, a longer term lowers the payment and raises total interest. Still, if rent can cover a higher payment, a shorter term may cost far less overall.
Are these examples loan quotes?
No. Only the 7.28% and 6.60% figures and the 7.00% prime rate are market references, and they are dated as of October 2026. Indeed, every other rate is hypothetical.
Do I pay the loan during construction?
It depends on the product. Sometimes, a HELOC may allow interest-only payments on the amount drawn. However, construction loans have their own structure, so see our guide to ADU construction loans.
General information, not financial or tax advice. Likewise, examples are hypothetical illustrations, not offers. Ask a licensed lender for a quote.