Building or renovating.

A construction loan doesn't hand over the full amount on day one; instead it releases funds in stages that line up with your builder's milestones, such as the slab, frame, lock-up, fit-out and completion. As each stage is finished, the lender typically arranges a quick check or valuation before releasing that portion of the funds to your builder. It's a sensible system that means you're only drawing on money as the work actually gets done, which protects you as much as the lender. We'll help you understand the schedule up front so there are no surprises, and keep things moving with the lender as each stage is reached.

Usually not, and this one catches a lot of people by surprise in a good way. During the construction period, you generally pay interest only on the portion of the loan that's actually been drawn so far, which keeps your repayments lower while the home is being built. As more stages are released, that amount gradually steps up. Once the build is finished and the full loan is drawn, your repayments move to normal principal and interest. We'll make sure you understand how the repayments change through the build, so you can budget for it comfortably and there are no nasty jolts along the way.

In most cases, yes. Lenders generally build construction lending around a fixed-price building contract, because it gives everyone, including you, certainty about what the project will cost. It's also one of the better protections you have as an owner, since it reduces the risk of costs creeping up midway through the build. There are some situations where other arrangements are possible, but they tend to be more complex and more closely scrutinised. We'll explain exactly what your lender expects and help make sure your contract and your finance line up neatly before you get started, so the money side is settled before the first sod is turned.

Often, yes, particularly for larger, structural renovations where the work happens in stages, such as a major extension or a significant remodel. The same progress-payment approach that works for a new build can suit these projects well. Smaller cosmetic updates might be better handled a different way, for instance by using your available equity or a redraw, so it really comes down to the scale of what you're planning. We'll help you work out the most sensible type of finance for the job you have in mind, so the funding actually fits the size and shape of the project.