Whether you are building a new home, or you are carrying out major renovations, we can assist you with applying for a construction loan that will be best suit your requirements.

Construction loans are different from regular home loans, due to building works requiring ongoing payments as the construction progresses. In the case of a traditional home loan, the totality of funds will be made available in a single lump sum, while a construction loan lets borrowers draw on the loan balance when payments need to be made to the builder. These payments are made at key stages of the building process and are known as progress payments.

There are usually 5 stages of construction typically know as:

  1. Slab
  2. Frames
  3. Lockup
  4. Fixing
  5. Completion

As each stage is completed, your builder will issue an invoice. You will simply send the invoice to your lender and authorize them to make progress payments from your Loan to the builder. The Lender may arrange a progress inspection of your property at certain stages during the construction and before the final progress payment is made. This helps monitor the build and ensure that you are only paying for completed work.

Constructions Loans have Interest Only payments during the construction period, meaning that your repayments are lower throughout this time, which can be handy if you have additional costs associated with rent during the time that the construction is being carried out.

When the construction period is completed, your loan will revert to a standard home loan and you will start making repayments on both the Principal and Interest, or you could continue to pay Interest only for a certain period if you have selected the appropriate loan product.

The application process for a construction loan is like that of a standard home loan. The exception is that additional documents may be required to be submitted to the Lender including the fixed price building contract, building plans approved by council, a copy of your builder’s licence details etc.

Our team have a wealth or knowledge and experience with Construction Loans and with a range of Lenders and products to choose from, we would certainly be able to recommend the best product that will suit your individual requirements.