Construction Loans
Building your dream home? Let us finance it correctly.
A construction loan isn't the same as a standard home loan, and understanding the difference upfront saves a lot of confusion once your build actually starts. Rather than receiving the full loan amount at settlement, funds are released in stages as your builder completes and invoices for each phase of work.
This is called a progress payment schedule, and it typically follows five stages:
Stage 1: Slab
Stage 2: Frame
Stage 3: Lock-up
Stage 4: Fit-out
Stage 5: Completion
The repayment structure works differently too, and it's one of the most commonly misunderstood parts of a construction loan:
- Interest-only during construction. You're not making principal and interest repayments while the build is underway, only interest.
- Interest is charged only on funds drawn down so far, not the full loan amount.
Repayments increase as each stage completes. As more funds are drawn down, your interest-only repayment rises in line with the amount released. The loan converts to principal and interest once construction is fully complete. After the final stage payment, repayments switch to your ongoing loan structure.
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See what your monthly repayments could look like based on your loan amount, interest rate and loan term.
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Find out how much you may be able to borrow based on your income, expenses and current financial situation.
Frequently Asked
Read through our FAQ’s for added information. Have other questions? Contact our team today.
Delays can extend the interest only period. We factor realistic timeframes into your loan structure to reduce the impact of this.
This depends on your loan structure and lender. We explain what flexibility is available before you commit.
This is worth planning for upfront. We discuss contingency options as part of structuring your construction loan, so a cost blowout doesn't derail your finance.
A fixed price building contract, council approved plans, and specifications are typically required before the loan can be assessed.
Your loan converts to a standard principal and interest mortgage. We manage this transition so it happens smoothly once the final stage payment is made.
Repayments are interest only during the build and calculated only on funds drawn down so far, increasing as each stage of your build completes.
