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Home construction loans

Prime Land and Construction Loans for full doc borrowers with a good credit history.

When the house of your dreams is not an existing house our Home Construction Loans can help you build that dream home. At Direct Credit Home Loans Australia we have extensive experience with Home Construction Loans and good relationships with reputable builders.

Generally there is a  90% maximum lend on a construction loan and you must demonstrate 5% genuine savings or equity in a property at this level of lending.

Home construction loans are classified into three:

  • Land and construction
  • Land only – Must intend to build on the land in 12 months
  • Construction only

What are my options for making repayments during construction?

While you have the land only, and for the duration of construction, the loan is variable rate as interest only. Interest is calculated daily and is due on the anniversary date of your loan. Once construction is complete the loan converts to a variable rate, principal and interest automatically. Remember, requests for other products can be made.

How does a construction loan work?

With a standard home loan all loan funds are advanced at settlement – by paying a purchaser, for example. Conversely, with a construction loan we will usually retain all of the cost to construct your property (this is usually the fixed price building contract amount).

Construction funds are progressively drawn down at each stage of construction. Each progress draw down is referred to as a ‘Progress Payment’.

Progress Payments are made directly to the builder. If we are only funding a portion of the cost to construct your home, you must contribute your own
funds before you can draw down the loan funds. Similarly, funds retained for construction cannot be used towards the purchase of land.

Applicable loans

CONSTRUCTION LOAN - Variable

Interest rate

from 7.70%

Comparison rate

7.92%

Loan type

Variable

Max LVR

90%

Application fee

$880

    • From 7.70 % Interest rate displayed : Under 70% LVR –on P&I repayments with  loan amount over $100,000.
    • Maximum Loan to Value Ratio is 90%
    • Regional areas considered
    • Lenders Risk Fee may apply
    • Minimum loan size is $100,000.
    • Maximum loan size $2,500,000 (Lvr restrictions apply)
    • Interest-only Loans available for Investment

    *The Comparison Rate is calculated on the basis of a loan of $300,000 over a term of thirty years, including application, valuation, lenders legal / settlement / risk fees, excluding searches, registration and government charges. Valuation fees based on metro home valued at or under $500,000 at $385.00 per valuation. Securities valued at over $500,000 and excluding metro areas POA.

    Warning: This comparison rate applies only to the examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan

CONSTRUCTION LOAN - Fixed

Interest rate

Fixed 7.39%

Comparison rate

7.61%

Loan type

3 - 5 Yr Fixed

Max LVR

90%

Application fee

$880

    • From 7.39 % Interest rate displayed : Under 80% LVR –on P&I repayments with  loan amount over $100,000.
    • Maximum Loan to Value Ratio is 90%
    • Regional areas considered
    • Lenders Risk Fee may apply
    • Minimum loan size is $100,000.
    • Maximum loan size $2,500,000 (Lvr restrictions apply)
    • Interest-only Loans available for Investment

    *The Comparison Rate is calculated on the basis of a loan of $300,000 over a term of thirty years, including application, valuation, lenders legal / settlement / risk fees, excluding searches, registration and government charges. Valuation fees based on metro home valued at or under $500,000 at $385.00 per valuation. Securities valued at over $500,000 and excluding metro areas POA.

    Warning: This comparison rate applies only to the examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan

Steps to your Home construction loans

1. Am I eligible for a loan?

  • Loan to Value ratio up to 90%
  • Fixed price builders contract required
  • Full doc borrowers only – Low doc currently unavailable
  • Owner builder does not qualify
  • Usual credit criteria applies for Prime loans

2. How much can I borrow?

See how much you can borrow using our simple borrowing power calculator, or call one of our friendly team to get a detailed borrowing capacity over the phone today.

3. Book a consultation or apply online

Call us on Freecall 1800 000 800 for a no obligation chat or, if you’re ready to apply get started now.

Start your application

We are an experienced team of mortgage professionals, providing a full suite of financial services. One call and we can quickly find that solution you’re looking for.

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