FAQs

Fixed-price contracts are provided by builders for the total cost of the project. Homeowners can then apply for that amount for their loan. Cost-plus contracts cover the time involved for the project at the builder’s hourly rate plus the supplies and materials costs.

To meet lender criteria for financing, renovations must be of a structural nature to an existing home.

Homeowners receive pre-approval first. The next stage of approval is given when Council-approved plans are provided, and the lender valuations are completed. Building works typically are given the go-ahead on settlement.

No. Progress payments are payments to the builder at the designated completion stages. Repayments are by the borrower and may be scheduled monthly or in sync with progress payments.

Construction stages and progress payments can vary with specifics of individual projects. A typical schedule may be on slab or foundation completion; framings completed; lock-up stage; initial fitout; and the final completion.

Construction loans are in the home lending sector but differ from home mortgages in format, criteria and the documentation required for the application. There are also differences with rates, terms and loan types.

Construction financing usually has a variable interest rate.

The downpayment required can range from 5% for homeowners with equity to 50% on renovation loans.

A drawdown loan is structured to allow the borrower to draw down on the funds required to pay the builder at the designated completion phases.

Yes. Financing is available for self-build projects, subject to lender approval.

Yes. Construction finance is available to cover the entire cost of a land and house package.