What is a construction home loan?
Also known as a building loan, this type of home loan is designed for either building a new home or making any structural renovations.
The progressive drawdown feature of a construction loan allows you to take out the loans in several instalments at various stages of the construction process, instead of receiving it all at once at the start. Because you only pay interest on the amount that is already drawn down, you pay less interest in comparison to other loans that charge you interest on the full amount of the loan from the very start.
Additional documents will be required during the application process, including council-approved plans, building specifications, your fixed-price building contract with a licensed builder, and insurance documentation, such as your builder’s public liability insurance.
Mates Rates is also able to assist with ‘Owner Builder’ construction loans, however, they have stricter lending requirements.