Construction Home Loan

The secret to saving money while building your dream home

Building a home or carrying out serious renovations on your existing home allows you to have a major say in the environment your family lives in. Unfortunately it’s also an expensive undertaking, which is why it’s important to seek the right type of home loan.

A construction home loan allows you to draw down on funds when your builder requires them at each building stage. This means you avoid paying interest on any loan amounts you haven’t yet drawn down.

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Review by

Richard Whitten is a money editor at Finder, and has been covering home loans, property and personal finance for 6+ years. He has written for Yahoo Finance, Money Magazine and Homely; and has appeared on various radio shows nationwide. He holds a Certificate IV in mortgage broking and finance (RG 206) and a Tier 1 Generic Knowledge certification (RG 146).

Expert review

The Construction Home Loan is available for owner occupiers building a home, and investors building an investment property. Once construction is completed your loan will revert to the variable rate Home Loan.

It’s a full documentation loan, meaning that to be eligible you must be able to supply the full range of income evidence and documents including payslips. If you require a low doc loan, you might want to start a comparison on our low doc page.

About this loan

What are the features and benefits of the Construction Home Loan?

  • Maximum loan amount. You can borrow up to a maximum of $1,000,000 with this loan, and a minimum of $50,000.
  • Maximum LVR. There's a maximum LVR of 90% with the Construction Home Loan, but keep in mind that borrowing with an LVR of greater than 80% will come with Lender's Mortgage Insurance (LMI) charges.
  • Construction features. As mentioned, this loan comes with the ability to make drawdown payments to your builder at the five stages of building. Keep in mind also that this loan covers a maximum construction period of 12 months.
  • Interest-only payments. This loan only requires you to make interest-only payments during construction, helping you maximise your cash flow during this expensive time.
  • Offset account. There's an offset sub-account available with this loan, although it should be noted that it's only available once construction is complete and the loan rolls over to the Home Loan.

What fees and charges come with this loan?

  • Early discharge fee. $300. You'll have to pay this fee if you pay your loan out early.
  • Settlement fee. $300. You'll be required to pay settlement fees to finalise your loan application and receive your funds.
  • Construction admin fee. $120. This extra fee is charged to cover the associated costs will incur as a result of this loan.
  • Progress inspection fee. $110 per stage. will require an independent valuer to visit your property during the construction and ensure that your builder has finished the work detailed in their invoice. The total cost of this over the five stages is $550.

Are there any hidden fees with this loan?

The Construction Home Loan fees are mentioned above. Note that there are still some charges you might have to pay which are not factored in above or in the comparison rate.
Note too that the valuation fee is $220, or at cost, which means depending on your situation this fee could be higher.

Who is owned by? is an online-only non-bank lender. They're a privately owned mortgage company and are 100% Australian owned. In addition, is underwritten by Firstmac, a large Australian mortgage company with $8 billion in managed mortgages and over 35 years of experience in the banking industry.

How to apply

To apply for this loan or find out more, click the 'Go to Site' or 'Find out more' buttons on this review page. This will safely take you to the website, where you can fill in some basic details and speak to a representative about your loan. has an easy-to-understand diagram included below which summarises the whole application process.

The below diagram is courtesy of and represents the loan application process after you contact them. application process

When applying for this loan, will want to know if you can afford your repayments, so they will want the following details:

  • Income information. will want to know your current income and details about your employment.
  • Debt information. Before granting you a loan, will require you to give them information about your current debts.
  • Personal information. You'll also be required to provide will identification and contact information.

The Construction Home Loan could see you get into your dream home without hefty fees or features you won't use. Add it to your comparison today.

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