Construction Owner Builder
Building or renovating can be stressful enough without having to worry about your finances, that is why if you are doing any work on your home or building a new home from the ground up then you should be looking at comparing construction loans specifically designed for owner builders. A construction loan gives an owner builder access to funds exactly when you need them, so you don’t have to worry about allocating your construction budget but more importantly you are not paying interest on funds you haven’t used yet.
Featured Construction Home Loan
Apply for a Dream Loan Construction Loan and get a low variable interest rate, plus no application fee, no valuation and no additional repayment fee.
- Interest Rate of 6.20%
- Comparison Rate of 6.23%
- Application Fee of $0
- Maximum LVR With LMI: 90%
- Minimum Borrowing: $50,000
- Maximum Borrowing: $750,000
Featured Construction Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au – Dream Loan Express – Construction |
Turn your dream home into a reality with a low interest rate home loan, plus no application and service fee. | 6.20% | 6.23% | $0 / $0 | 90% | $50,000 / $750,000 |
 
|
 State Custodians Mortgage Company Construction Loan |
A flexible loan with a competitive rate from a leading non-bank lender. | 6.34% | 6.44% | $0 / $0 | 90% | $100,000 / $1,000,000 |
|
 HomeStar Advantage Construction Loan |
Up to 90% LVR and one of the lowest rates on the current market | 6.28% | 6.29% | $0 / $0 | 95% | $150,000 / $2,000,000 |
|
Features of Construction Loans For Owner Builders
Using a home loan for the construction of a new home is very different to simply choosing a loan for the purchase of an existing home where the sequins and structure of your loan is much more static. As a result, features of construction loans include:
- You borrow only the cost not the value. When your construction loan is approved it will be approved for the value of the land plus the cost of the building materials all builders quote to build your home. Therefore where it is cheaper to build a home than to buy an existing one it is also cheaper to borrow to build than to borrow to buy because you are able to borrow less.
- You make interest only repayments during construction. This is because you have not drawn down on the full amount of your loan so you do not yet need to repay it. Also during the construction of a new home you are probably also paying rent or another mortgage and so making interest only repayments means less of a commitment.
- You progressively drawdown on your loan. At the end of each major building stage you draw on the amount you need to pay the builder or contractors. Also interest is calculated on only the amount you have drawn down, so you are only repaying what you have used.
- A construction loan reverts to a standard loan. After your final progressive drawdown on your construction loan your loan becomes a standard home loan and you may be able to choose the type of loan or loan product at this stage or you may have had to choose your loan at the beginning of the construction period. Regardless make sure that the loan product your construction loan reverts to is one you will be happy with.
- Allows for a construction period of up to 2 years. If you are considering building your own home you probably already know that there are going to be hiccups along the way however your construction loan would generally allow you up to 2 years building time at a competitive interest rate.
How To Use A Construction Loan As An Owner Builder
Using a construction loan is quite straightforward and your lender will usually tell you what you need to do and when you should be doing. Some of the things to expect when it comes to being an owner builder using a construction loan include:
- You don’t have to be building a new home. While construction loans are typically used by borrowers building a home you can also apply for and use a construction loan if you are planning major renovations on your home. You also don’t have to combine your land loan with your construction loan as you may have already repaid your loan on your land or paid cash for your land and now want to borrow just to build, if you are borrowing for a land purchase keep in mind that you can usually only borrow 60 to 65% of the value of the block.
- You will have to show proof of building plans. To apply successfully for a construction loan when you’re ready to build you will usually have to show council approved plans and a fixed-price building contract from your builder or contractor.
- Each building stage must be approved. After each building stage is completed a valuer from the bank will visit your property, plus you will be able to sign off on each building stage when you are happy with the work and happy for the builder or contractors to be paid.
A construction loan gives you the flexibility and freedom coupled with the reliability you need and want when you are tackling the home building process so contact Home Loan Finder now to find out whether you qualify as an owner builder for a construction loan and we can make sure you get the lowest interest rate so you make the lowest repayments possible during your interest only period and over the life of your loan.
Related posts:
- Construction Loans & Owner Builder Mortgages
- Home Loans for Owner Builders
- Bricks and Boards – Construction Loans Solve Housing Shortage
- RAMS Construction Option
- Homestar Advantage Construction Loan
- First Home Construction
- BMC Construction Loan
- bankmecu Construction Loan Package
- How to Choose a Construction Home Loan
- eChoice Construction Loans
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
State Custodians Mortgage Company Standard Variable Offset Loan | Awarded Mortgage of the Year 2012 – this multi-award winner features 100% offset and a loyalty 0.25% rate drop after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
|
Ask A Question