Making structural changes (like knocking down walls and adding rooms) to your home? This is where a construction loan might be right for you.
Construction loans work a little differently to regular home loans. As the builders complete various stages of the renovation, payments from the bank are progressively released to the builder. This helps to monitor the progress of the renovation and means you don’t have to worry about managing payments to the builder directly. You make interest only repayments on your loan until the renovation is finished, which means you could have some extra cash handy during the construction period.
Once the renovation is complete, you can start making repayments on both the principal (loan amount) and interest, or you can continue to pay interest only for a period of up to five years.
Find out more about construction loans.