Construction Loans

Construction loans are a little different to traditional loans. You will usually need a fixed price building contract or tender, that the lender will review. Their valuer will then estimate the on-completion value of the property, the loan itself will be based on this value (or the cost of construction plus land value). If this is to be an investment property, some lenders will even consider future rental income which could increase your borrowing power. Once approved, the lender will make progress payments to your builder based on a prior agreed drawdown schedule.

This bank lender offerss the best of both worlds, allowing you to fix your construction loan at a very low rate and link a 100% offset account to it. This gives you most of the flexibility of a variable rate loan at a much lower cost.

For traditional construction loans, yes. However, we do have more flexible solutions which may be suitable for your circumstances. Please get in touch to discuss and we'll see what we can do to help.

If you don't already own the land, you might want to consider splitting the loan into a "land loan" and a "construction loan", allowing these amounts to be paid by the lender at different times.