Construction Home Loans

A Construction loan uses the funds to build a new dwelling or property and generally involves draw down payments where you receive the funds in instalments after a body of construction work is complete (ie, foundations have been laid).

Advantages

The Construction loan allows interest only payments for the land portion prior to construction and interest only payments during the construction process
The funds will be paid to you in drawdowns ensuring you only pay interest on the portion of the construction loan you have drawn down
Upon completion of construction, your construction loan will automatically revert to a standard variable rate home loan
Construction loans are available for both registered builders and owner-builders
You have up to 24 months to complete construction after settlement of land
The total construction loan may be split between two accounts after construction is complete to identify personal and investment debt made.

Disadvantages

Owner-builders are allowed a maximum 50% Loan to Value Ratio (LVR)
Funds are released at predetermined stages after proof of work has been established
Council approved plans and a fixed price tender is required at time of the Construction loan application