When you get the construction loan, you will make your interest payments out of the construction loan. Your interest will only be for the amount you have used. Most banks will give you 4-7 draws, in which they deposit money into your account, so will only pay interest on what you have borrowed. So your first interest payment should be a few hundred dollars and increase each month as you pull more money from the bank. I just finished building my second house the final constuction loan was about $180,000 and I paid a total of about 5k through 6 months. The 5k down is going to have to be out of your pocket, a lot of banks will require this if you already have another mortgage, a lot of times they will make you put it in a CD with the bank. This is from my experience but each bank is different.