Construction Lending

In the Australian financial landscape, a construction loan is tailored for those embarking on the journey of building or renovating their homes, offering a unique funding structure. The loan amount is released in predetermined stages that correspond with key construction milestones, providing a financial flow that mirrors the building progress.

This staged release system benefits borrowers by limiting interest payments to the amount of money actually drawn at each stage, rather than on the total loan amount. In contrast, a regular home loan is provided as a single lump sum, intended for the acquisition of pre-existing properties, with interest payments commencing on the full loan amount immediately after settlement.

Furthermore, construction loans necessitate detailed building plans, a clear timeline for project initiation and completion, and often a budget outline, ensuring that the loan disbursements are in sync with the actual construction needs and timelines, thereby offering a structured financial framework that supports the construction process from start to finish.