Construction Home Loan
If you’re building a new home or planning major renovations to your existing home, you may need the flexibility of a construction loan.
Unlike a standard home loan, you draw down funds as you need them and only pay interest on the amount you have accessed so far.
Government grant for building your first home. If this is your first home, then you can access the first-home owners grant. The grant for people building their own home is available to all eligible applicants. To find out if you are eligible you can visit
http://www.firsthome.gov.au/ The Loan AmountThe loan amount is determined using construction cost estimates, which come from quotes and tenders from builders, as well as council approvals and the amount of work estimated to be carried out by yourself or family and friends. The lender will then approve the loan and you access the funds in stages, as each major part of the construction is finished.
Repaying the LoanYou only pay interest on the funds which you have withdrawn, rather than the total loan amount, which offers an affordable way to finance the construction of the property. Some construction loans will allow you to make small repayments during the construction phase, thereby reducing the principal and interest on the loan.
However, as the rate is variable, your repayments will go up during the construction phase if interest rates rise.
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