What’s it’s for
A construction loan allows you to build or renovate and pay the builder when key stages of the build are complete.
How to access the funds
Unlike buying an established property – where funds are paid directly to the borrower – with construction loans we ‘disburse’ loan funds to the builder. Not all at once, but in line with the payment schedule in your building contract.
As a guide:
- Deposit
- Base or slab
- Frame
- Lock-up
- Fixtures
- Completion
How much could you borrow?
Subject to our normal lending criteria, we can look to lend you up to 90% of the estimated fully constructed value of your home.
Construction loan deposit
Your deposit can come from equity in the vacant land or the building you’re renovating. Or, it can come from your own savings, a guarantor, or with the help of schemes like the First Home Owners Grant.
Documentation to provide
In addition to the standard home loan documents like payslips, you will need to provide the following in relation to your build.
- Council-approved plans and specifications
- Your fixed price building contract
- Builder's indemnity insurance
Your plans and building contract help our valuer to estimate the fully constructed value of your home. Which in turn helps us figure out what you could borrow.
Before you apply
Your plans must be Council-approved and a registered builder selected before we can move your application to formal approval. You can apply for pre-approval without these, noting that pre-approval is typically only valid for 3 months.
Rates and features
You can apply for either of these home loans below and use it for construction purposes:
- Offset Home Loan – fully featured, 100% offset
- Clean Energy Home Loan – reduced interest rates for going green
Repayments
Principal and Interest repayments apply to construction loans once we fund the first progress payment amount.
You can request Interest Only repayments during your build period (up to a maximum period of 12 months) on our Offset Home Loan and Clean Energy Home Loan.