Land & Construction Loan

Key features

Designed for borrowers building a new home or planning major renovations of their existing dwelling, these home loans carry variable rates and feature an interest-only repayment structure during the construction phase, and after the project is completed it reverts back to principal and interest. Unlike standard home loans, the funds will be drawn down in stages rather than a lump sum payment.

Advantages

You only have to pay interest on the money you've drawn out rather than on the total mortgage amount. You are also allowed to make unlimited repayments during this period.

Considerations

Because they are variable rate home loans, if the rates go up during constructions your repayments also rise. These loans do not allow you to convert to fixed term during this phase. Since you are only paying interest on the amount you have drawn out, you are not reducing your total debt significantly.

Suitable for

As the name implies, construction home loans are suitable for those undertaking major capital works on their property.

Land & Construction Home Loans

Institution	Actual Rate	Comparison Rate *	Institution	Actual Rate	Comparison Rate *
	7.80%	7.90%		7.80%	7.87%
	7.67%	7.80%		7.80%	7.87%
	7.70%	7.91%		7.81%	7.94%
	7.37%	7.14%		7.86%	7.99%

* Comparison rates are based on a loan amount of $300,000 over a 30 year term. Comparison rate schedules are available via each lender’s website or by contacting Compare-Homeloans. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates are effective as of 11-01-2011.

All information provided is a guide only and may not be complete for your purposes. Whilst displayed rates are regularly updated, neither Compare-Homeloans nor the Providers warrants the accuracy of any information and you should confirm it with the Provider before acting on it. Except for responsibilities implied by law which cannot be excluded, neither Compare-Homeloans nor the Provider is responsible for any loss, damage, cost or expense incurred by you as a result of any error, omission, or misrepresentation in relation to the data herein.