This is known as making progress payments. It helps to monitor the build and ensure you’re only paying for completed work.
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Construction loans
Building a home or planning a major renovation? Construction loans are designed to help you get there.
How construction loans help you build or renovate
The money is released in stages as construction progresses
You only pay the interest on your loan until construction's done
You don't have to make repayments on your full loan amount during construction, which means you could have extra money handy for unexpected expenses or rent to stay somewhere while you're building.
Great for big renovations
They aren't just great for building a new home – a construction loan can be good for your next major renovation.
Why choose a construction home loan with us?
Here's how our Complete Home Loan Package could help you reach your construction goals.
How do construction loans work?
Our Home Lending Specialists can help you choose one of our variable rate construction loans. Here’s how they work...
Home building and renovating guides
From budgeting your costs to picking the right builder.
Find out about your financial options and things you should consider.
It really depends on the size of the project and your budget.
Your construction loan application checklist, whether you’re building from scratch or renovating an existing home.
Get a full breakdown of what happens from the first day of construction to getting the keys to your new home.
Whether you're buying land or a property, check out our home buying guidance for every step.
Thinking about home insurance?
Make sure you’re covered with home insurance options for home owners, landlords and renters.
Your construction loan questions answered
A construction loan is a standard home loan, but while you're building there are some important differences. Firstly, funds are released in stages as construction progress to ensure you're only paying for work that’s been completed. Secondly, you only pay interest on your loan until you've finished building.
It is possible to refinance a construction loan to a new lender but be prepared to provide additional information and paperwork, as these loans can be more complicated.
A construction loan is like any other home loan. If you're getting a construction loan to fund the building of a new home, you'll need to provide a deposit or pay Lenders Mortgage Insurance (LMI).
You will need to make repayments while building, but not necessarily for the full amount. Progress payments are made at different stages of construction, so you only pay for work that's been completed at every stage. You'll also only pay the interest of the loan, keeping repayments lower.
Like all home loans, how much you can borrow depends on many factors like your income, assets and expenses. You can calculate your potential borrowing power or chat with a Home Lending Specialist to get a better idea.
What’s the comparison rate?
It’s a tool that can help you identify the truer cost of a loan. It’s calculated using a standard formula that includes the interest rate, as well as certain fees and charges relating to a loan (not all fees and charges are included).
Comparison rate warning:
Rate subject to change. Comparison rate is calculated on the statutory assumption of $150,000 loan over 25 years. Different rates apply for different loan amounts and may depend on the duration of a fixed rate period or the ratio of the loan amount to the property value. Lending and eligibility criteria, fees and charges and T&Cs apply and are available on request. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.