Construction loans

Building a home or planning a major renovation? Owner builder and 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

This is known as making progress payments. It helps to monitor the build and ensure you’re only paying for completed work.

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.

A variable rate to enjoy

Premium Select Home Loan

2.28%
p.a.

Variable rate

2.31%
p.a.

Comparison rate

A discount off our standard variable rate isn’t the only thing to look forward to. There are less fees to think about with no account maintenance fees or annual fee for the life of the loan. Plus, you can add an optional 100% offset account to help save on interest. 1 Offset Transaction Account must be held in the same name as the loan account. Other exclusions apply.

Rate subject to change. Owner occupied borrowings up to 70% of the property value for principal and interest repayments. Minimum loan size of $20,000. Understand the comparison rate.

Why choose a construction home loan with us?

Here's how our Complete Home Loan Package could help you reach your construction goals​.

Save on fees​

No application fees, property valuation fees or progress payments fees. Other fees and charges may apply. ​

Save on interest​

With the option to add multiple offset accounts, you could save on home loan interest.​

Flexible repayments​

Pay weekly, fortnightly or monthly to suit your pay cycle.​

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...

The builder issues an invoice at each stage

There are usually five stages of construction, typically known as slab, frame, lock-up, fixing and completion.

As each stage is completed, your builder will issue an invoice.

We make progress payments

Simply pass the invoice to us and authorise us to make the progress payments from your loan to your builder. Valuations are done at certain stages.

Find out more about progress payments.

You make interest only repayments

As each progress payment is made, you'll only need to pay the interest on your loan until construction is finished.

When construction's complete

You start making repayments on both the principal (loan amount) and interest, or you can continue to pay interest only for three or five years – you choose the interest only term when you apply for the loan.

Home building and renovating guides

From budgeting your costs to picking the right builder.

Benefits and things to keep in mind to help you decide if building a home is the right move for you.

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?

Home insurance is essential when getting a home loan. We can arrange home insurance packages through our partner CommInsure that are tailored to your needs.

We’re ready to help

Your very own Home Lending Specialist will respond within one business day. You can talk on the phone, meet at a branch, or have a Mobile Lending Manager come to you.

Your construction loan questions answered

Answers at your fingertips

1

What is a construction loan?​

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.

2

Can I refinance a construction loan?

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.

3

Do I need a deposit for a construction loan?

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).

4

Do you pay on a construction loan while building?

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.

5

How much can I borrow for a construction loan?

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.

  1. Offset Transaction Account must be held in the same name as the loan account. Other exclusions apply.