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How does it work?

Our construction loan is a great option for you if you’ve bought land and are looking to build, or if you’re completing extensive renovations to your property. So how does it work?

The different phases of a construction loan

1

Before you apply you'll need:

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Finalised purchase

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A Licensed builder

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Building plans

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Building contracts

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Builder’s insurance

Once your loan is approved the 6 construction stages are:

1 phase-icons

Deposit

2 phase-icons

Slab down

3 phase-icons

Frame up complete

4 phase-icons

Lock-up

5 phase-icons

Fixing

6 phase-icons

Practical completion

Once construction is about to finish, and before final payment, you’ll need:

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A copy of your Occupancy Certificate

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A copy of your home building insurance

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Signed authorisation, so the builder can fix anything before the final payment is made.

Final payment

Once the final payment has been made we’ll convert your construction loan to a standard variable loan, which will include both a redraw facility and offset-sub account.

Get started

Apply online today. Or, one of our friendly lending specialists can do the hard work for you and manage your paperwork over the phone.

Either way, we can settle your loan quickly so you can start saving thousands sooner.

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Talk to a home loan expert

Book a time that suits you to chat with a lending specialist.

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Ready to apply or want pre-approval?

Call us on 13 10 90 or simply start your application online.

Top reasons to choose this loan

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Interest Only during
construction

Pay interest only repayments during the construction period.

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Progress claims &
valuations

Updates on progress and valuation before a portion of your loan gets released and with zero recurring fees.

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No monthly or
ongoing fees

Save thousands over the course of your loan with zero recurring fees.

Construction Loan Rates

Construction Owner Occupier Rates

Product Name

LVR

Principal & Interest Rate p.a.

Interest Only Rate p.a.

Construction Owner Occupier-

Up to 80%

NA

7.19%
7.00% comp rate*

 

Up to 90%

NA

7.39%
7.33% comp rate*

Construction Owner Occupier-
Interest Only

80% MAX LVR
7.19%
7.00%

Variable rate p.a.

Comp rate p.a.*

90% MAX LVR
7.39%
7.33%

Variable rate p.a.

Comp rate p.a.*

Want to see more home loan options? Compare our home loans

Want to see more home loan options? Compare our home loans

$0

Application fee

As an online lender, we save in overhead costs and pass those savings directly on to you. So, we don't charge you an application fee.

$0

Ongoing fees

In addition to our great low rates, we don’t charge you any ongoing fees.

$0

Annual fees

Similarly, no annual fees helps save you thousands over the life of your loan.

Smart friends

Real Good Rewards

As a loans.com.au customer, if you refer a new customer to us we’ll reward you.

$1,000 New Home Loan Customer
$250 New Car Loan Customer
Learn more

Home loan repayment calculator

Use our home loan calculator to estimate what your monthly mortgage repayments could be. Whether you're refinancing or just wanting to understand how much you can afford, all you have to do is enter how the amount you would like to borrow, interest rate, home loan term, payment frequency, and repayment type (either principal & interest or interest-only).

%
years
years
Estimated savings from repayments graph

Your estimated repayments are

$279.21
$50,000
$50,513

Calculator assumptions

Our construction process

1
Application

Application

Simply fill out your home loan application online by entering some of your details, or chat to one of our friendly lending specialists over the phone and they can complete your application for you.

2
onTrack

onTrack

After your application is complete, use our system we call onTrack on your desktop or device to add your documentation such as payslips and bank statements, and track the progress of your application.

3
Speak to specialist

Speak to specialist

You will then have an appointment with one of our lending specialists to organise your preliminary approval of your loan, and help you progress through the home loan approval process through to settlement as quickly as possible.

4
Signing document

Signing document

Check onTrack to received your final approval, mortgage documents and loan agreement. You must sign these and return them in to onTrack.

5
Settlement

Settlement

Your loan will settle and you’ll start saving with your new loan rate, and get your keys to your new dream home!

6
Access your account

Access your account

Once settlement is complete, we will send your login credentials to start managing your payments in the Smart Money app.

7
Fund construction

Fund construction

Now we start to pay for each stage as it is completed. As each stage is finished, we arrange a progressive inspection and then, if everything is in order, we pay the builder directly. The stages of the construction loan are listed below.

  1. Deposit - Paid to the builder to commence work

  2. Base - Concrete slab complete or footings and base brickwork complete

  3. Frame - House frame complete and approved by inspector

  4. Lockup - Windows/doors, roofing, brickwork, insulation

  5. Fixing - Plaster, kitchen cupboards, appliances, bathroom, toilet, laundry fittings/tiling, heating, fixing/internal doors, etc., plumbing, electrical, painting

  6. Practical completion - Fencing, site clean-up, final payment to builder

Frequently asked questions

The comparison rate identifies the true cost of a loan. The reason the comparison rate is lower than the standard rate because the loan will begin on a higher interest rate due to being construction and on interest only repayments. Once the construction period and interest only repayment period is complete, the loan will revert to a standard variable, principal and interest rate, which will likely be lower than the construction interest only rate.
With the completion of each stage of your renovation, we'll arrange an inspection of the property and then pay the builder directly for the completed work. Each progress payment is called a drawdown.

The number of drawdowns will depend on the agreement between you, your builders, and your lender. Loan repayments in constructions loan are interest-only but once the entire renovation is completed, the construction loan will revert to principal & interest repayments, unless you request to extend the interest-only period.
The 6 construction stages are:

1) Deposit
2) Slab down
3) Frame up complete
4) Lock-up
5) Fixing
6) Practical completion

A progress inspection will be carried out by an independent valuer for each building stage. Once your builder sends the invoice to us, a progress inspection will be ordered.
Yes, you may be eligible for our construction loan if you are completing extensive renovations to your existing property.
There are a few documents you'll need to provide in your home loan application. Some of these include:

  • Two (2) most recent consecutive payslips for each applicant
  • Three (3) months bank statements showing regular salary credits, including most recent salary credits with the name of the employer evident
  • Evidence of Salary Sacrifice or Packaging (if applicable)
  • Evidence of Company Vehicle/Car Allowance (if applicable)
  • Six (6) consecutive months of home loan statements showing consistent repayment history (if applicable)
If you are an employee, you'll need to supply a couple of recent consecutive payslips to confirm your income and employment. You will also need to provide up to three months' worth of bank statements showing your salary paid by your employer and other income. An internet transaction history will generally do.

If you have income paid to more than one account you'll need statements for all those accounts. Alternatively, you could provide your most recent Tax Assessment Notice and a letter from your employer that confirms your salary.

If you're self-employed, the paperwork will be slightly different. When you refinance a loan, you'll need to provide evidence of your ability to make repayments, so your lender will request two years of business and personal tax returns and ATO assessments.
loans.com.au requires a minimum deposit of 10% of the purchase price of the property, or the current value of the property if you are refinancing.

To avoid paying Lenders Mortgage Insurance (LMI), borrowers need a 20% deposit in most cases.
You can see if you prequalify for your home loan using this link: https://www.loans.com.au/pre-qualify/ Once you have completed this, we can generally get preliminary approval to you within 48 hours.
The settlement process is different depending on each individual applicant's personal situation, but we generally say it can take anywhere between 4 to 6 weeks. To get to settlement, you'll need to apply, speak to one of our lending specialists, upload your documentation, get the property valued, have your loan approved and the documentation delivered and signed, then you'll settle.
We charge a $300 settlement fee plus a security assessment fee. The security assessment fee for a standard property in a metropolitan area in a major city starts at $230 for properties valued up to $1 million. The security assessment fee is not refundable and is payable when the security assessment is ordered.
After settlement, you'll nominate on your direct debit form when you start repayments. Our Customer Care team will also confirm your repayment dates when calling you at loan settlement. Additional repayments into a fixed home loan are allowed and are up to $10,000 per year.
We sure do! Introduce someone to loans.com.au and we'll give you a $450 bonus when they settle their loan with us! They will also get $150 off their settlement fee.

Once your loan application has been submitted, you will be given access to our online portal onTrack. In onTrack, we will collect some more information from you and you can track your application. When your loan settles, you will be given your referral code in onTrack.

You can refer as many people as you like!
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For the last 10 years, thousands of Aussies have trusted our experienced & locally based team with some of their biggest financial decisions - buying a home, a new car or refinancing to save on interest.

Our customers trust us to support them with low home loan and car loan rates, approved quickly through our easy-to-use online app.

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Very easy process

Very easy process with a friendly lending manager to guide you through.

Helen D.
25 Feb 2024

A big thanks to loans.com.au

My experience in getting a loan from Loans.com.au has been great. I think I was also fortunate in getting a highly experienced loan officer Ray Glowacki who was able to evaluate the circumstance and offer me the most suitable product.

FRANK D.
31 Jan 2024

Extremely helpful

Ray has been extremely helpful in setting up my refinance, he made the process so easy and was happy to take the time to answer all my questions. Thanks Ray!

Tamara W.
17 Jan 2024

Helpful!

Ray was an absolute pleasure to work with. His knowledge and years of experience meant he was able to assess our complex situation to find the best outcome for us. Ray thank you so much for your help and support every step of the way!

Samantha S.
16 Dec 2023

Professional and less stressful application

A big thanks to Ray and his team for making this process seamless. Professional advice and communication throughout the process. Professional and less stressful application than with any other we have been involved in before.

Gareth W.
12 Dec 2023

Great customer service!

Great customer service, thanks Ray!

Chris W.
19 Nov 2023

Simply amazing!

Ray was simply amazing! He took on my crazy timing request and helped drive the process to conclusion. Took some of the stress out of purchasing a property!

Clive G.
14 Nov 2023

Quick efficient and friendly!

Incredible company that has 10/10 customer service. Quick efficient and friendly!.

Gdenma G.
21 Sep 2023

Would highly recommend

Ray couldn’t have made the process of refinancing any easier for us. Would highly recommend.

Scott B.
21 Aug 2023

Excellent People, Cheap rates, fast process

Excellent People, Cheap rates, fast process. I had to arrange finance in 2 weeks and they sorted it out. Rena has been extremely helpful.

Sam S.
26 Jul 2023

Incredible experience

Had full formal approval within 10 days from applying online. Hassle free, transparent and above all else a really competitive interest rate. Thanks all for making an incredibly stressful and high stakes event so seamless. HIGHLY recommend!

Tim D.
25 Jul 2023

Brilliant service

Brilliant service, timely manner for response and a quick turn around in approval. Will definitely be recommending.

Ominous B.
03 Jul 2023

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