How Long Does It Take To Build a House?

How Long Does It Take to Build a House? Guide to Home Construction Timelines

Building a home could take an average of nearly eight months, but a contractor- or owner-built house could stretch the timeline beyond a year.

It’s not as simple as buying a plot of land and heading to Home Depot. Construction permits, financing, and even the weather can lengthen your timeline.

Average Time to Build a House

Despite the extra time it takes to build a home from scratch rather than buy an existing home, it’s no surprise that many Americans are opting to build a home.

Why? To customize a home to their tastes, for one thing. And the narrowing gap between the average cost to build a house and the cost of buying an existing home.

The average cost to build a house, including the land, was nearly $450,000 in May 2022, the National Association of Home Builders reported. The median cost to buy an existing home was a bit over $414,000.

So how long does it take to build a house?

According to the U.S. Census Bureau’s latest home building statistics, from 2021, the average time to build a one-unit residential building is 7.6 months. Here’s the breakdown.

Construction Purpose

Average months

Built for Sale 6.7
Contractor Built 12.6
Owner Built 14.3

This time frame encompasses the entire home building process, from obtaining building permits to picking out the design.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Factors That Affect How Long It Takes to Build a House

As with everything, the devil is in the details, so let’s look at factors that influence how long it takes to build a home.

Type of House

The type of home and design will have a significant impact on the construction timeline.

If you’re buying new construction, it will fall into one of these categories:

•   Tract homes. These go up in a new development. The buyer chooses the design features and lot.

•   Spec homes. With these move-in-ready homes, the buyer still might be able to choose some of the finishings.

•   Custom homes. A builder customizes a house to the buyers’ specifications on their land.

Predesigned home packages likely accelerate the construction timeline, while custom homes are likely to extend it. After all, custom designs require more coordination between architects, engineers, and contractors.

House Size

Naturally larger homes take longer to build than smaller homes.

If you’re planning on a particularly ornate design, make sure you budget extra time (and money) for the project.

Larger properties with complex layouts are also more likely to encounter greater engineering challenges than simpler layouts. It’s also likely that unanticipated issues will arise during the build.


While scenic, remote areas are attractive to many people seeking to build a primary or vacation home, the locale will heavily affect the ease of transporting materials, workers, and equipment.

Rocky terrain will also be more expensive and difficult to excavate and prep for construction. Installing common utilities will be more difficult.


Unless you’re looking into a modular home vs. a stick-built home, inclement weather can severely delay construction, as many parts of the process cannot be completed in rain or snow.

Your worksite may get flooded due to lack of completed drainage, and building materials may be damaged if not properly protected.


Homeowners with sufficient equity in their home could apply for a home equity line of credit to fund their new home.

But many people will seek a construction loan. Obtaining a construction loan comes with its own complications.

Expect underwriting to take longer than it does for a typical mortgage, as the lender will want a detailed plan, budget, and schedule for the construction. The lender may also need to approve your builder.


Construction permits and zoning approval for home building can be significant time drains and are often beyond your control. A good contingency is to find a contractor who is familiar with the local application process.

Materials and Labor

Volatility in material prices and availability made it hard for contractors to plan projects in 2022. As lumber and plywood prices settled down, cement and diesel costs rose. Shortages in cement and concrete products were expected to endure.

The availability of labor slowed construction starts in 2022 and was expected to remain the top challenge for most contractors.

In general, contractors are particularly busy during the spring and summer, so contracting with a builder before those seasons could be a good idea.

The Process of Building a House

Here’s the typical home construction timeline:

•   Buy land and obtain financing

•   Obtain building permits and approvals

•   Excavate the land and prep the foundation

•   Build the framework and install utilities

•   Put in walls, floors, and roof

•   Install fixtures, appliances, and finish the exterior/interior

•   Landscape, pave driveways, and prepare the grounds

•   Get a final inspection from authorities

Shortening the Time It Takes to Build a House

While much of the home building process is outside your control unless you’re actually building the house yourself, there are ways you can mitigate the chance of complications.

Here are a few ways you can shorten the average time it takes to build a house.

Avoid Deviating From the Plan

One of the best ways to avoid lengthening a construction timeline is to ensure that you have building plans finalized well before you break ground, and sticking to them.

Making last-minute changes is anathema to construction timelines.


Avoid being the bottleneck when it comes to decision-making. The construction team will likely take their cues from you. So if you’re late answering an email, design query, or request for approval, your contractor will often be unable to proceed without your input.

Reduce Complexity

Keeping things simple will probably lead to a faster build, if that’s a priority. More complex plans clearly lead to lengthier construction times and introduce a greater likelihood that unforeseen problems will arise.

Craft the Contract With Care

The construction contract should contain a deadline for completion and what will happen in the event of a delay.

It’s common for a contract to specify that “substantial completion” must occur by a certain date, and to define that. A clause can express that extensions can be given for unforeseen delays.

When a change is made after a contract is signed, it’s referred to as a “change order.” The change order might specify a deadline extension or new completion date.

Builders who breach the contract may be responsible for damages.

The Takeaway

How long does it take to build a house? It could take seven to 14 months. A construction contract will typically contain a deadline and what will happen if a delay occurs. Allowing for a reasonable schedule can help ensure that your project finishes on time.

3 Home Loan Tips

  1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, allow home mortgage loans with as little as 3% down for qualifying first-time homebuyers.
  2. Generally, the lower your debt-to-income ratio, the better loan terms you’ll be offered. One way to improve your ratio is to increase your income (hello, side hustle!). Another way is to consolidate your debt and lower your monthly debt payments.
  3. When building a house or buying a nontraditional home (such as a houseboat), you likely won’t be able to get a mortgage. One financing option to consider is a personal loan, which can be faster and easier to secure than a construction loan.


How long does it take to build a house by yourself?

For the ambitious home builders among us, it takes over 14 months to build a house, on average. The timeline can easily stretch out to two years or longer, depending on your experience and whether or not you choose to employ any assistance.

What causes delays when building a house?

Plenty of factors can delay a build. They include:

•   Owner-caused delays

•   Contractor-caused delays

•   Weather

•   Logistics

•   Obtaining permits and approvals

•   Size and scale of the project

•   Communication

Can I get a loan to build a house?

You can apply for a construction loan or if you already have a home, a home equity line of credit, home equity loan, or cash-out refinance to fund the new home. A personal loan could be used for at least part of the build.

Photo credit: iStock/acilo

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

This article is not intended to be legal advice. Please consult an attorney for advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


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What Is a Duplex? Features, Pros & Cons

What Is a Duplex? Should You Consider Owning One?

What’s a duplex? It’s a two-for-one special in the real estate world: two units in one building on one plot of land.

Duplexes are the perfect blend of income production and personal space for some. For others, they may be too small and involve too much maintenance.

Read on to learn what a duplex is and who should consider owning one.

Characteristics of a Duplex

Duplexes, which fall into the multifamily property category, have these common characteristics:

•   Single lot. While there are two units, they’re on the same lot.

•   Shared yard. Duplex units will typically share a yard and will have a common wall or ceiling/floor.

•   Similar size and layout. The two units in a duplex may not be exact replicas, but they often have the same square footage and a similar layout.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Types of Duplexes

Duplexes take one of these forms:


When the two units are atop each other, that’s a stacked duplex. Occupants have a common ceiling or floor.


In a side-by-side duplex, units are next to each other. Occupants have a shared wall.

In general, the units in a multifamily property have separate entrances, kitchens, bathrooms, and utility meters.

Here’s what a duplex is not: a “twin home.” With a twin home, two homes share a wall, but each is an individually deeded home on an individual lot.

Pros and Cons of Owning a Duplex

Duplex living isn’t for all homeowners but could be the perfect fit for some. Let’s start with some upsides.

Pros of Buying a Duplex

•   House hacking. An owner can live in one unit and rent out the other, earning income to help cover a mortgage.

•   Affordability. Owner-occupants can use a government-backed home loan and enjoy the same low or no down payment requirement that they would with a primary home. Also, duplexes are often located in more affordable neighborhoods, and buying a two-unit property will typically cost less than buying two stand-alone single-family homes.

•   Tax advantages. Owner-occupants can write off mortgage interest and property tax on the half of the property they live in. If the other half is a rental, they can write off repairs to that unit, any utility bills paid for it, and any management fees. The owner can depreciate the rented half of the property.

•   Easy tenant management. For first-time landlords, living in a unit and renting the other one can be a lower-stress alternative to investment property. A resident owner can address issues immediately and keep an eye on ongoing maintenance.

•   Buying property together. Whether it’s friends owning real estate together or a multigenerational household looking for some private space, a duplex might be a perfect fit, as the property is already naturally divided into two. There’s proximity but also space.

•   A boost in getting a mortgage. With conventional or government-backed financing, you can usually use projected rental income to qualify for the loan. The lender will add a portion of the rental income to your gross income to determine your debt-to-income ratio.

Cons of Buying a Duplex

Some drawbacks also exist. They include:

•   Lack of privacy. In a duplex, occupants are on top of each other or right next door. Sharing a wall or ceiling/floor might be hard for some homeowners. If privacy is a priority, a duplex might not be the right fit. That’s also true of co-op and condo living.

•   Possibly a large down payment. If both units will be leased, you won’t qualify for a government-backed loan. You’ll need to put down at least 20% for a conventional loan and will pay a higher interest rate. If you do plan to live in one of the units and use a conventional loan, you may qualify to put 15% down.

•   Tricky taxes. Tax season gets more complicated for duplex owners than owners of traditional single-family homes.

•   Sharing space. Duplex owners may have to share a laundry room or backyard with the other occupants.

•   Landlord duties. Unless a duplex owner purchases the property with another party or has the property managed, they’ll have to serve as landlord for some or all of the home. That means regular maintenance and searching for tenants, which could be stressful for some homeowners.

Recommended: Pros and Cons of Different Types of Homes

Finding a Duplex

Duplexes are enticing to people looking for a starter home, other owner-occupants, and real estate investors, which can make the search much more competitive.

As duplexes are often more expensive than single-family homes, figuring out your budget before the search will help (give this mortgage calculator a whirl), as will having your anticipated down payment at the ready and credit in good shape.

Having financing lined up can make the process more seamless. If the duplex will be owner-occupied, that may help determine which kind of loan to choose among the different mortgage types.

Should you go with a mortgage broker or direct lender? You can get quotes from both.

They should be able to answer your mortgage questions. And it pays to shop around for home loan offers.

Should You Own a Duplex?

Owning a duplex isn’t for everyone, but it could be the place to call home for buyers who want to dip their toes into the investment property market. Although duplexes come with quirks, some benefits (especially rental income) may outweigh the drawbacks.

If you do plan to live at the property, you might eventually outgrow it and move on. In that case, your home equity can help purchase the next home.

And that duplex and other assets can help build generational wealth.

The Takeaway

What is a duplex? Two living units in one property. Duplexes pack a two-for-one punch when it comes to real estate ownership. They aren’t the right fit for all house hunters, but so many buyers are interested in duplexes that they’re a hot ticket.

Ready to start searching for a duplex? Begin the journey with SoFi Mortgages.

SoFi offers mortgages for owner-occupied primary residences, second homes, and investment properties.

Check out all the advantages of SoFi home loans.


How can I profit from my duplex?

Duplexes can be either entirely rental properties or owners can choose to occupy one of the units. As an owner-occupant, you can use rent from the other unit to supplement or perhaps pay your monthly mortgage entirely.

As an investment property, you can collect rent on both units, with the profit potential based on the monthly mortgage payment.

How do I rent out a duplex?

There’s a high likelihood you’ll rent out one of the units year-round. However, some duplex owners use the other unit as a guest space, short-term rental, or even an artist studio, depending on their needs.

Should I sell my duplex?

Deciding whether or not to sell your property is a personal choice based on circumstances and the local market. A duplex, though, can be a good property to keep as an investment, as the two units provide a lot of flexibility for renters, Airbnb guests, and an owner’s place to live.

Photo credit: iStock/RichLegg

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


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8 Tips for Buying a House When You Have Bad Credit

8 Tips for Buying a House When You Have Bad Credit

Buying a house with bad credit can be challenging, but it’s doable with planning and preparation. Subprime borrowers — homebuyers with lower credit scores — may be eligible for both federally backed loans and conventional mortgages.

If your credit score is less than stellar but you’re ready to buy a home, it’s important to pause and take stock of your finances. This guide will review strategies and steps to secure a mortgage and buy a house with bad credit.

How to Buy a House With Bad Credit

Lenders will consider a number of factors — not just your credit score — when determining if you’ll be approved for a mortgage. Your debt-to-income ratio and proof of income represent a couple of things you need to buy a house.

Figuring out how to buy a house with a so-called bad credit score can vary on a case-by-case basis. These eight tips will help you assess your financial situation and plan accordingly to buy a house with bad credit.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Recommended: Understanding Mortgage Basics

1. Get Your Credit Reports

As the saying goes, knowledge is power. Assessing your credit is a valuable first step to understand where you stand in qualifying for a mortgage.

A credit report can provide a detailed overview of your creditworthiness, including your total debt, payment history, and age of your credit accounts. You can request free credit reports from this site or once a year directly from each of the three major credit reporting companies: Equifax, Experian, and TransUnion.

Upon receipt of your credit reports, it’s important to review any derogatory marks (e.g., late payments) and check for errors. Addressing mistakes could give a quick boost to your credit score.

Many lenders use the FICO® score model to calculate credit scores, from 300 to 850, and categorize them like this.



Very Good





It’s not uncommon for your FICO score to differ slightly among the three credit reporting companies, so mortgage lenders take the average or use the middle score.

According to the June 2021 Origination Insight Report by Ellie Mae, the average FICO score ranged from 743 to 753 for mortgages that closed in the first half of 2021. Borrowers with credit scores in this range or higher generally receive the most competitive mortgage rates.

Meanwhile, borrowers with credit scores below 650 represented only 6.2% of mortgages in June 2021.

An estimated 30% of U.S. consumers had credit scores in the subprime range, or less than 670, in Q1 of 2021, Experian found. (There is no universal definition of “subprime.” And Experian sometimes uses the term “nonprime,” for the category of borrowers with scores between 601 and 660.)

2. Plan to Pay a Higher Mortgage Interest Rate

Lenders may consider borrowers with poor credit more likely to default on a mortgage loan. To account for this risk, borrowers with lower credit scores usually face higher interest rates.

A modest increase in the mortgage interest rate can bump up your monthly payment and translate to much more interest paid over the life of the loan. For example, a borrower with a 30-year fixed-rate loan of $250,000 at 5% interest would pay $53,468 more in interest than a borrower with a 4% interest rate.

Paying a higher interest rate may be an unavoidable part of buying a house with bad credit. An option is to refinance your mortgage later to secure a lower rate and save on interest, especially if you make timely payments and improve your credit over time.

3. Pay Your Other Debts

How much debt you have and your ability to pay it is another factor lenders weigh when approving mortgage loans. This is captured through your debt-to-income ratio. Your DTI ratio is your monthly debt obligations divided by your gross monthly income and multiplied by 100.

Higher DTI ratios suggest that borrowers have less ability to make monthly payments. A 43% DTI ratio is usually the highest a borrower can have to obtain a qualified mortgage.

Paying off other debts, like credit cards and student loans, can improve your DTI ratio and signal to lenders that you can afford mortgage payments. Reducing your debt can boost your credit score too by lowering your credit utilization ratio, which is a measure of the amount of available revolving credit you use.

4. Draw Up a Budget

Buying a home is exciting, and it’s easy to lose sight of the true cost of homeownership when shopping for your dream home. But this puts you at risk of becoming “house poor,” meaning you have to spend a disproportionately high share of your monthly income on housing.

Although buying a home is a way to build wealth, having little left over from your paycheck makes it hard to save for retirement and realize other financial goals.

The dreaded B-word, budgeting, is a useful way to ensure that you can afford a home before you walk away with the keys.

An effective budget accounts for both the upfront costs of buying a home (down payment and closing costs) and the long-term expenditures. Besides the loan principal and interest, it’s important to consider property taxes, homeowners insurance, and maintenance, as well as private mortgage insurance (PMI) if you plan to put less than 20% down on a conventional loan, or mortgage insurance premiums (MIP) for an FHA loan, no matter the down payment. They add up, but PMI and MIP allow many people to buy homes who otherwise wouldn’t be able to.

You can get a sense of how much your monthly mortgage payment might be with SoFi’s mortgage calculator tool.

Recommended: Homeownership Resources

5. Save Up a Down Payment

If you’re a buyer with subpar credit, putting more money down on a home can be advantageous. A larger down payment means borrowing less money, making the loan less risky to lenders and improving the chances of qualifying with bad credit. A smaller loan amount also accrues less interest.

But of course, saving up for a down payment can be challenging. If you meet first-time homebuyer qualifications, you may be eligible to receive down payment assistance.

Recommended: First-Time Home Buying Guide

6. Opt for an FHA Loan

Buyers with lower credit scores or less money tucked away for a down payment could benefit from an FHA loan. FHA loans are issued by private lenders but are insured and regulated by the Federal Housing Administration.

Borrowers with credit scores of at least 580 may put just 3.5% down. If your credit score is 500 to 579, you might still qualify, but need to make a 10% down payment. Borrowers who have declared bankruptcy in the past may still qualify for an FHA loan.

Keep in mind that borrowers with higher credit scores who qualify for a conventional (nongovernment) mortgage may put just 3% down.

7. See if You Are Eligible for a VA or USDA Loan

The federal government backs other loan types that can help buyers with fair credit.

Active-duty service members, veterans, or certain surviving spouses may use a VA loan to purchase a primary residence. VA loans usually don’t require a down payment, and the U.S. Department of Veterans Affairs does not set a minimum credit score for eligibility. Lenders have their own requirements, though, so it’s important to compare options.

The U.S. Department of Agriculture guarantees mortgages issued to low- and moderate-income homebuyers in eligible rural areas. No down payment is needed, and the USDA does not specify a credit score requirement. But lenders will still evaluate a borrower’s credit history and ability to pay back the loan.

VA loans typically come with a one-time funding fee that varies; USDA loans, an upfront and annual guarantee fee.

8. Build Up Your Credit Scores

Raising your credit scores can increase your chances of qualifying and securing better loan terms, but it takes time. Negative marks usually stay on your credit reports for seven years.

Paying bills on time, every time, can gradually build up your credit scores. And if possible, it’s a good idea to stay below your credit limits and avoid applying for several credit cards within a short amount of time.

Soft credit inquiries do not affect credit scores, no matter how often they take place. Multiple hard inquiries if you’re rate shopping for an auto loan, mortgage, or private student loan within a short period of time are typically treated as a single inquiry.

But outside of rate shopping, many hard pulls for new credit can lower your credit scores and indicate distress in a lender’s eyes.

The Takeaway

Can you buy a house with bad credit? Yes, but you may have to put more money down or accept a higher interest rate to qualify. If taking steps to improve your credit aren’t enough, you might consider using a cosigner or exploring federal loan programs.

Knowing how to buy a house with bad credit is a good first step to making it happen. You can check out this home loan help center to continue your homebuyer education.

If your financial foundation is feeling pretty firm, consider a home loan with SoFi. Qualifying first-time buyers can put as little as 3% down.

View your rate with just a few clicks.


Is a 500 credit score enough to buy a house?

Yes, but the options are limited. Borrowers with a credit score of 500 might be able to qualify for an FHA loan.

How can I buy a house with bad credit and income?

Lenders look at your full financial picture, not just credit and income, in a mortgage application. Certain loan types don’t have strict credit or income requirements either.

What is a good down payment for a house with bad credit?

A 20% down payment is ideal, but most borrowers aren’t able to put that much down. Any increase in your down payment could improve your loan terms.

How do I know if I’m eligible for an FHA loan?

FHA loan requirements include proof of employment and the necessary down payment based on the borrower’s credit score (those with scores of 580 or above qualify for the 3.5% down payment advantage). The home must be a primary residence, get appraised by an FHA-approved appraiser, and meet minimum property standards.

Photo credit: iStock/SDI Productions

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


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20-Year vs 30-year Mortgages

20-Year vs 30-year Mortgages

A 20-year mortgage is far less common than a 30-year mortgage, but when you want to pay a lower rate and save a substantial amount in interest, it’s worth considering a 20-year mortgage … with a big “if.”

If you can consistently afford the higher mortgage payments.

Here’s what you need to know about 20-year mortgages:

•   What is a 20-year mortgage?

•   How a 20-year mortgage compares with a 30-year mortgage.

•   Why people choose a 20-year mortgage?

•   The advantages and disadvantages of a 20-year mortgage.

What Is a 20-Year Mortgage?

A 20-year fixed-rate mortgage is a home loan whose total financing costs are calculated on a repayment term of 20 years.

Homebuyers and refinancers choose their mortgage term. The 30-year fixed-rate mortgage is the most popular. The 15-year fixed-rate mortgage sometimes shares the spotlight.

The 20-year mortgage merely gets less attention. A 20-year home loan may be a happy medium for homeowners who want lower monthly payments than a 15-year mortgage but who want to pay off the loan more quickly than 30 years.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Why Are 20-Year Mortgages Less Common Than 30-Year Mortgages?

When it comes to a 20-year vs. 30-year mortgage, why don’t more borrowers choose the shorter term? Because the monthly payments are higher.

A 30-year term makes a home more affordable on a monthly basis, even though homeowners will pay more over the life of the loan than they would over 20 years.

Buyers considering a 20-year home loan may need to lower the top end of their house-hunting price range so they can qualify for the mortgage.

In exchange for saving an awesome amount by financing with a 20-year loan, you may have to forgo HGTV-style perfection or buy a starter home.

Or downsize.

Recommended: How Much of a Mortgage Can I Afford?

Why People Choose 20-Year Mortgages

People who choose a 20-year mortgage do so because they will pay much less in interest than they would on a 30-year mortgage. That benefit stems from a shorter term and a lower interest rate.

Generally, the longer the term, the higher the rate on conventional conforming loans, FHA and VA loans, and jumbo loans.

An amortization table reveals how much interest is paid on a mortgage over the loan term. When you decrease the length of your mortgage in exchange for a higher monthly payment, the savings are substantial.

20-Year Mortgage

30-Year Mortgage

Loan amount $500,000 $500,000
Fixed interest rate 6.0% 6.25%
Monthly payment (principal & interest) $3,582 $3,079
Total interest paid $359,752 $608,289
Total paid (loan amount + interest) $859,752 $1,108,289
Amount saved $248,537

It might be shocking to see nearly $250,000 in interest savings by financing a home with a 20-year mortgage.

If you can swing it, good deal! Keep in mind, though, whether you’re a millennial homebuyer or retiree, that a 30-year mortgage may give you wiggle room with your budget if you need it.

You can always pay off a 30-year mortgage early if you make extra payments, especially toward the principal.

20-Year Fixed vs an ARM

In a time of rising rates, an adjustable-rate mortgage (ARM) may look good to a homebuyer who’s planning to stay put for just a few years. The introductory rate for a conventional ARM, jumbo ARM, or FHA or VA ARM may be lower than that of a fixed-rate mortgage.

Whether you’re interested in a 5/1 ARM, whose rate is fixed for five years and then will adjust once a year, a seven- or 10-year ARM, or any other adjustable-rate loan, you’ll want to know how long you plan to stay in the home and to fully understand the rate adjustments and caps.

Recommended: Online Mortgage Payment Calculator

Advantages of a 20-Year Mortgage

Fixed payments over 20 years: Your payment will be the same each month for the life of the loan.

Lower interest rate: 20-year mortgages typically have a lower interest rate than their 30-year counterparts. Lenders reward a shorter payoff date with a lower interest rate.

Pay less interest over 20 years: You’ll avoid 10 years of interest by paying on a 20-year loan instead of a 30-year loan.

Pay off mortgage sooner: A 20-year mortgage is scheduled to be paid off 10 years sooner than a 30-year mortgage.

Build equity more quickly: Equity is built faster with a 20-year loan than a 30-year loan. The sooner you can pay more on principal (which a 20-year loan naturally does), the sooner you’ll gain home equity.

Monthly payments still may be affordable: You may find that the payments for a 20-year loan are comfortable and doable.

Disadvantages of a 20-Year Mortgage

Higher monthly payment: A 20-year vs. a 30-year mortgage will result in a higher monthly payment. This may make it more difficult to qualify for other financing, such as investment property or cars.

Harder to qualify for: Because the monthly payments are higher, a 20-year home loan may be harder to qualify for than a 30-year loan.

Lower target price: If you’re in the home buying process and want to finance your new purchase with a 20-year loan, you may need to shop for a home at a lower price point.

Recommended: Buying in One of the 50 Most Popular Suburbs

The Takeaway

If you’re looking for a home loan that could save you a significant amount of money in interest, a 20-year mortgage might be right for you — if you can handle the higher monthly payments without fail. If you need lower monthly payments, a 30-year mortgage may be the better move.

SoFi offers fixed-rate mortgages with terms of 10, 15, 20, and 30 years. Low down payment options and competitive rates are just some of the advantages of SoFi Home Mortgage Loans.

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20-year mortgage vs 30-year mortgage: Which has the better interest rate?

Decreasing the amount of time you repay your loan will help you save on interest costs in a big way. First off, the interest rate you’ll pay is typically lower. Second, your overall interest cost is much lower because you’re avoiding 10 years of interest that you would pay on a 30-year loan.

Is it harder to get a 20-year or 30-year mortgage?

A 20-year mortgage is harder to qualify for because the monthly payments will be higher for the property you want to purchase. If you’re determined to use a 20-year loan, you may find you’ll qualify for a lower purchase amount to get the numbers to work for your monthly budget.

Photo credit: iStock/ArLawKa AungTun

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.


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How Much Does It Cost to Build a Duplex?

How Much Does It Cost to Build a Duplex? Expenses You Need to Know About

The cost to build a duplex varies widely, based on many factors. The average approaches $390,000.

Understanding the nuts and bolts of constructing a brand-new two-unit structure gives a better sense of how much it will cost to build a duplex.

Let’s define duplexes and then examine estimates for building one.

Key Points

•   The cost to build a duplex can vary depending on factors like location, size, materials, and labor.

•   On average, the cost to build a duplex ranges from $200,000 to $600,000.

•   Additional costs to consider include permits, design fees, landscaping, and utility connections.

•   Building a duplex can be a good investment opportunity and provide rental income.

•   It’s important to work with professionals and create a detailed budget before starting a duplex construction project.

What Is a Duplex?

Duplexes come in different sizes and designs, but they have commonalities, like:

•   One building, one lot. The two units are in one building on the same piece of property.

•   Common partition. Duplex units have a shared wall or ceiling/floor. Occupants may share the yard space and a laundry room.

•   Mirrored size or layout. The two residences in a duplex are often mirror images of each other or the same size.

In general, buying a duplex will cost less than a stand-alone single-family home in the same area.

And it might be cheaper to buy a duplex than build one, although you can customize new construction.

Then there are people who convert a single-family home into a duplex. That could cost $80,000 on average.

Duplexes are in demand, thanks to owner-occupant financing advantages and potential rental income. They also can be found among HUD homes for sale.

First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.

Factors That Determine the Cost of Building a Duplex

Plenty of factors influence the cost to build a duplex, with some choices stretching the budget more than others.


In more desirable areas, the plot could really thicken in terms of price. Land prices in the Northeast tend to be the highest, with New Jersey terra firma the dearest.

Materials and Labor

Depending on supply and demand, the cost of materials and labor can vary dramatically. If there’s a shortage of labor or supplies, duplex builders may pay a premium.

Building a duplex, or any property from the ground up, requires specialized labor, including these pros:

•   Architect

•   Structural engineer

•   General contractor

If the lot has a property on it, the buyer may need to pay to demolish it before building a duplex. If the lot is bare, adding utilities such as plumbing, electricity, and gas will factor into the cost of the build.

Size of the Duplex

In general, the larger the structure, the higher the cost.

The more rooms and the more complicated the layout, the higher the price.

Type of Duplex

The type of duplex a person decides to build can affect the project’s cost. Here’s how the kind of duplex can influence its price tag:

•   Stacked ($95 to $135 per square foot). Stacking the units on top of each other will typically be the least expensive build, as it’s the most efficient. Owners may be able to save on labor as the units will mirror each other and save time on plumbing.

•   One-story, side-by-side ($110 to $180 per square foot). This is likely a more complex build.

•   Two-story, side-by-side ($130 to $220 per square foot). This type of duplex is even more complex and has more square footage than the above options.

Miscellaneous Factors

Depending on the lot purchased or desired features, there could be additional costs associated with the build. Common expenses include:

•   Tearing down an existing home. If there’s a property on the lot, it can cost between $7,500 and $15,000 to tear it down.

•   Interior design. While not required, hiring an interior designer could help both spaces feel more liveable and comfortable. The average interior designer costs between $75 to $450 an hour.

•   Modular duplex. A modular duplex, meaning buying a prefabricated home, costs $100, on average, per square foot.

•   Garages. If the duplex owner wants a garage or two attached to the home, they may pay $35,000 more.

How Much Does It Cost to Build a Duplex?

With an understanding of the cost factors that can affect the budget for the duplex, now it’s time to address the big question.

Here are overall costs, then costs based on labor and square footage using up-to-date national averages.

Overall Construction Cost

These are the high-end, low-end, and national averages to build a duplex.

High end


Low end $142,000
Average $388,000

By comparison, building a new house of 2,500 square feet could cost $345,000. The average existing single-family home in the country sold for $376,700 in late 2022, according to the National Association of Realtors®.

Labor Cost

A large portion of the budget to build a duplex will go into labor and specialized professionals. Here’s an average of what someone can expect to pay for labor:

•   Architects: 10% to 15%

•   Structural engineer: $500

•   General contractor: 25%

•   Electrician: 8% to 12%

•   Plumber: 10% to 14%

•   Foundation: 8% to 10%

•   Framing: 10% to 12%

•   Exterior finish: 6% to 10%

•   Roofers: 8% to 12%

•   Windows and doors: 3% to 7%

•   Interior finish: 6% to 10%

•   Bathroom: 3% to 5%

•   Kitchen: 6% to 10%

Cost by Square Foot

Here’s a breakdown of average cost per square foot (including labor):

•   1,000 square feet: $95,000 to $220,000

•   2,000 square feet: $190,000 to $440,000

•   3,000 square feet: $295,000 to $660,000

•   4,000 square feet: $380,000 to $880,000

•   5,000 square feet: $475,000 to $1,100,000

The Takeaway

While building a duplex isn’t that different from building a single-family home, the process does include additional labor and considerations that can sway the budget dramatically. Size, style, and location can influence the cost to build a duplex.

Some people interested in building a new duplex will look for a construction loan, but if you’re a homeowner who’s eligible for a home equity line of credit, that could be a good source of funding.

SoFi brokers a HELOC that allows qualified homeowners to access up to 95%, or $500,000, of their home equity.

If you’re considering buying an existing duplex, check out SoFi Home Loans.

And here’s big news: A SoFi Jumbo Loan goes up to $3 million.

Getting prequalified is simple, and rates are competitive.

Start turning your duplex dreams into reality.


Is it cheaper to buy or build a duplex?

Given the recent rising price of labor and materials, it is likely cheaper to buy a duplex than build one from the ground up.

How much do you have to put down to build a duplex?

A construction loan typically requires a 20% to 30% down payment. A HELOC or home equity loan could be used instead if you’re eligible.

How long does it take to build a duplex?

It takes 11.9 months on average to build a two- to four-unit residential building, not counting the time it takes to obtain permits, according to the U.S. Census Bureau’s latest Survey of Construction.

Photo credit: iStock/Luckie8

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see Equal Housing Lender.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


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