Decided to build your dream home, an investment property or tackling a renovation project? With our range of construction home and investment loan options, you can withdraw your funds gradually over a period of 12 months while you build. This means you only pay interest on the portion of the loan you have drawn - keeping your money in your pocket for longer. Choose from a range of home and investment loan options: variable package, one year or two year fixed package, standard variable or basic variable loans.

  • Progress payments

    Draw down on your loan progressively and pay your builder at key stages. You’ll only pay interest on the funds you’ve used.

  • Cash flow

    Make interest only repayments during the construction period, giving you extra cash when you need it.

  • Save on interest with offset

    With our Variable Home Loan Package construction loan, you could save on interest by linking your loan to an offset account. The money you have in your offset account will offset the amount you owe on your loan, and you'll only be charged interest on the difference.

  • Lower repayments

    Only pay interest on funds drawn down, not the whole amount upfront. This means lower loan repayments.

  • Family guarantee

    Available for first home buyers

Rates and fees

The interest rate and any applicable fees depend on the type of construction loan you choose. Progress Draw Fee $400 is applicable on all construction loans.

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    Construction loan FAQs

    • Can I redraw on my construction loan during the construction period?

      No, you cannot redraw during the construction period. If you choose a variable rate loan you will have a redraw facility available at the end of your construction period.

    • Will I pay interest on the full amount?

      Your loan will be disbursed as the funds are required, so you'll only pay interest on the portion of the construction loan you have drawn down.

    • What type of loan can I select for my construction loan?

      You can choose from a range of options including:

       - Home Loan Package (Variable or Fixed - 1 or 2 year term only)
       - Standard Variable
       - Basic Variable

      The construction period of your loan will be interest only. You have the option of selecting whether you will have a further interest only period at the end of your construction period, or if the loan reverts to principal and interest repayments.

    • How long do I have to construct my new home?

      The construction period for your loan is up to 12 months from the date of settlement.

    • What is a construction loan?

      A construction loan is a type of loan for people who plan to build their own home, investment property or complete extensive renovations. It differs from a traditional home loan in that it allows you to progressively have payments made from your loan to pay your licenced builder in stages throughout the construction process. It gives you the flexibility of interest only payments during the construction period and only paying interest on the amount you use.

    • Can I link an offset account to my construction loan?

      Yes, with our Variable Home Loan Package construction loan. By linking it to an offset account, you could save on interest. The money you have in your offset account will offset the amount you owe on your loan, and you'll only be charged interest on the difference.

    • Is there a construction loan fee?

      Yes, there is an additional once-off upfront fee for progress draws of $400. This covers all required progress payments during your construction period. For full details refer to our Fees & Charges booklet.

    • What are progress payments and how do they work?

      Progress payments let you draw down on your construction loan progressively, so you can pay your builder at key stages during the construction period. You’ll only pay interest on the funds you’ve used. Before your final progress payment is made, a satisfactory valuation from one of our valuers must be completed. This confirms that the build has been carried out as per the original submitted plans.

    • What types of building contracts are used for construction loans?

      Fixed price building contracts are most common for construction loans. Other types of contracts may be considered, but please reach out to us to confirm.

    • What documents do I need?

      If you’ve chosen a registered builder, you may be asked to provide:

      •A signed copy of the Industry Standard Fixed Price Contract
      •A copy of building plans and council permits
      •A copy of the builder’s licence
      •The builder’s bank account details
      •Copies of insurance policies, including Builders All Risk/Public Liability Insurance, Domestic/Home Warranty Insurance, and Public Liability Insurance

    • What are the stages of construction?

      The standard stages of construction are:

      1. Preparation – plans, permits, fees, insurance, etc.
      2. Foundation – levelling the land, laying the slab, excavations, plumbing, etc.
      3. Framing – constructing walls, roof trusses, windows, door frames, etc.
      4. Lock-up – adding everything you need to turn your building into a house and locking it up.
      5. Fix-up – plastering, sealing, adding your appliances, bathroom installed, etc.
      6. Completion – site tidied, fences up, and builders receive final payment.

    • Can I borrow to buy land?

      Yes. If you are buying land without a building contract, you can apply for a regular home loan. Then when you’re ready to build, reach out to us and we can help. If you are buying a house and land package, you can get a construction loan. The first drawdown would be for the purchase of the land, and progressive drawdowns would cover the building stages.

    • How do I pay for demolition?

      If you have enough equity in your property to cover the demolition costs and the new build, you may be able to borrow the funds. Otherwise, you will need to use your own savings to cover the cost of demolition before the construction can commence.

    • Can I use my construction loan to pay for furnishing and decorating?

      No. If you want to borrow money for more than just the build (for curtains, blinds, furniture, appliances and so on), you may need a separate loan. Talk to us about your options.

    • When do I need to get home insurance?

      Make sure to get home insurance before the final payment stage. We’ll need to confirm the house is insured before making the final payment to your builder. To show this is complete, send in a copy of your home insurance certificate with your final drawdown request.

    • Are construction loans eligible to participate in the Home Guarantee Scheme (HGS)?

      Yes. People’s Choice are a Housing Australia authorised Participating Lender and a construction loan is one of the options members can consider as part of this Australian Government initiative.

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