Most lenders these days offer the option of a construction home loan. A construction home loan allows borrowers to pay the home loan in stages while your property is being built. Some institutions will also offer you an interest free period for your home loan. This helps you to afford the cost of construction while also paying a mortgage.
While you have the total amount pre-approved and part of the loan, the stages of payment are also called draw downs and generally include the purchase of the land and several key construction stages. It is a great way for borrowers to save money on interest while their property is being built because the interest you pay on a construction home loan is the draw down amount. So you don’t pay for the cost of the home upfront until it is built.
Australia’s leading home loan comparison service, RateCity.com.au can help you understand how much you will need to repay using our free Australian Home Loan Calculator where you can select different interest rates, repayment terms and other features. You can also compare home loans, including fixed home loans and variable home loans to find yourself a great deal.
If you need some more information you can review RateCity’s home loan guide provides additional information.
