A construction loan is a specialised mortgage designed to finance the building or major renovation of a property. Unlike traditional home loans, construction loans provide funds in stages, aligning with your project’s progress, and help cover costs such as labor, materials, and permits.

Unlike a traditional home loan, which provides the full amount upfront, a construction loan disburses funds in phases based on the construction progress. Interest is paid only on the amount drawn down, not the total loan amount, which helps manage cash flow during the build.

The amount you can borrow depends on factors such as your income, creditworthiness, and the estimated cost of the construction project. Lenders will assess your ability to repay the loan and ensure the project’s budget aligns with their lending criteria.

To qualify for a construction loan, you generally need a detailed construction plan, a fixed-price building contract with a licensed builder, and a deposit. Lenders will also assess your financial situation, including income, expenses, and credit history.

During the construction phase, repayments are typically interest-only, helping you manage costs while the project is ongoing. After construction is completed, the loan generally transitions to principal and interest repayments. We can guide you through this process to help you find a repayment structure that fits your needs

Progress payments are instalments made to your builder at various stages of construction. These payments are released based on the completion of specific project milestones, as assessed by us or an appointed inspector, ensuring funds are available as needed throughout the build.

Yes, construction loans can also be used for substantial renovations or extensions to your current home. The process is similar to new construction, with funds released in stages based on the renovation’s progress, and we are here to help you navigate these options.