Construction loans are available for those who are looking to;
Build a new home on their own land
Buy a house and land package
Renovate their home or investment property
Small scale property development of not more than 4 units on a block of land
For large scale construction and property development go to our commercial loans website
With most construction loans you make interest only repayments during the construction period. After construction has finished you can choose to make principle and interest payments or continue with interest only repayments.
During the construction phase you only pay interest on the amount you borrow for each stage of the building process. Typically construction is completed in five stages and you draw down on the money at the beginning of each stage. Most lenders charge a progress payment fee at each stage of construction.
Therefore, if the total borrowed amount is $300,000 and you only require $100,000 for the first stage of development then you only pay interest on $100,000 and not the entire loan amount.
Those looking to renovate their existing home may choose an equity line of credit home loan. This loan allows you to use the equity in your home to renovate.