How are construction loans different to normal loans?
If you’re building rather than buying an established home, then you may need a handy little thing called a construction loan!
Construction finance is nifty because it allows you to borrow money in stages, rather than a single lump sum.
As the construction of your home progresses, your loan amount increases and so do your payments – these are called progress payments.
Super simple repayments
When purchasing an established home you would normally make repayments on both the principal and interest of your loan, but with a construction finance you will only pay the interest on your loan until your home is finished.
Once your home is built your loan will convert to principal and interest payments like most other loans.
Construction loans make building less scary – you won’t be paying the full cost of your mortgage before your home is complete, freeing up your finances for your rent while you wait. We can help you find the best construction loan with the right lender!