Construction loans Perth

The funds are released in stages as the build progresses rather than in one amount at settlement. You pay interest only on what has been drawn, so repayments climb with each stage. Once construction finishes, the loan converts to a standard principal and interest home loan.

No, interest applies only to the balance drawn down so far, so early stages cost far less than later ones. Most lenders also allow interest-only repayments during construction. Budget around the repayment at full drawdown, because that is what you face in the final months.

It is possible, though considerably fewer lenders offer it and they typically lend a lower proportion of the finished value. You need an owner-builder approval, a detailed costing schedule and evidence you can fund any shortfall. We will tell you honestly whether your project is fundable.

The drawn portion of your loan remains payable and you are left to complete the build with another builder. Indemnity insurance may cover part of the loss, subject to the policy. This is why builder selection and a sensible contingency matter as much as the interest rate.

Usually only if they are inside the fixed price building contract, because the lender values the property from that contract. Landscaping, fencing, driveways, retaining and window treatments are commonly excluded. They arrive at the end, so budget for them separately from the start.

Often yes, if you already own the block and it has been valued. Equity in the land can contribute towards or cover the deposit on the construction facility. How much a lender will recognise depends on a current valuation and on your serviceability, subject to approval.

Lenders set a period for the build to be completed, and it varies between them. If your builder runs over, an extension can usually be arranged, but it needs to be requested rather than assumed. We flag the deadline early so it does not become urgent.

Speak to us before you sign. A fixed price contract commits you, and finding out afterwards that the numbers do not work can put your deposit at risk. We check the project against real lender policy first, and advise on the finance clause to include.

Most residential contracts in Western Australia use five, though builders name them differently. The deposit is paid on signing, usually from your own funds. Base or slab is released once the footings and slab are down. Frame follows when the frame is up and inspected. Lock-up covers roof, external walls, windows and doors, and is typically the biggest single stage. Fit-out and practical completion covers internal fixtures, cabinetry and finishes, then the final payment.

A fixed price building contract signed by both parties, council or shire approval and the relevant building permit, final plans and specifications matching the contract exactly, your builder's registration and their indemnity insurance certificate, the progress payment schedule from the contract, and quotes for anything outside the contract that you intend to add.

Interest on the drawn balance, which rises with each stage, plus progress payment or drawdown fees and any valuation fee the lender charges at each stage. You also keep paying your rent or your existing mortgage for the duration, and any costs outside the building contract come out of your own funds.

You are demolishing the lender's security before building the new one, so lenders value the land as vacant and then value the property as if complete. Demolition sits outside most building contracts, along with service disconnection and any asbestos removal. Budget for where you will live during the build, and for site works on a sloping block. Equity in the existing property often funds a good part of the project.

Your owner-builder approval from the Building Commission and any relevant trade background, a detailed costing schedule trade by trade, quotes from the subcontractors you intend to use, a realistic contingency because owner-builds run over more often, and evidence you can fund the gap between what you borrow and what it costs. Some owner-builders are better served by a land loan plus an equity release than by a construction facility.