17%

34%

51%

68%

85%

100%

Construction loans for building and renovations

You’re planning to build a new home and now you need to find the right home loan. Construction loans work a little differently to existing property home loans, to protect you financially as your new home is built. Funds are released progressively instead of in a lump sum at settlement. Your builder is paid at the end of each construction stage once the work has been inspected and approved.

How do construction loans work?

Construction funds are released once your home loan has been formally approved and construction commences. Progressive payments are made at intervals to coincide with the five stages of construction. These are typically the deposit, base, frame, lock up, fit-out and final completion stages. 
The benefit of progressive payments is that you only pay interest on the portion of the loan that has been paid out. These can be made on an interest-only or principal and interest basis. Speak to your emoney lending specialist about which type of interest structure you require.

Progressive drawdown stages

STAGE 1
Deposit

The initial stage of construction where the buyer pays the vendor the initial percentage required to start the building process.​

STAGE 2
Base/Slab

Second stage of construction where the foundations and concrete slab are laid.​

STAGE 3
Frame

Once the concrete base has cured, the framework is built.​

STAGE 4
Lock up

The house is built to lock up stage with exterior walls, windows, doors and roof installed.​

STAGE 5
Fit out/Completion

The focus is on the interior of your home and getting it to a point where you’re ready to move in.​

How much can you borrow?

Use our borrowing calculator for an estimate of your borrowing capacity or
contact one of our lending specialists to discuss your situation.

construction ebook image

Construction Loan Guide

Download our  handy guide for tips that will help take the stress out of building your home.

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