Compare construction loans offered in Australia

Find home loans from a wide range of Australian lenders that best suit your needs, whether you're investing, refinancing or looking to buy your first home. Compare interest rates, mortgage repayments, fees and more. - Data last updated on 19 Jun 2018

Compare construction loans offered in Australia

Tailored Home Loan Fixed (Principal and Interest) 5 Years
Advertised rate
4.19%
Fixed - 5 years
Comparison rate*
4.93%
Monthly repayment
$1,221
Real Time Rating™

3.67 / 5

Compare
Choice Package Tailored Home Loan Fixed (Principal and Interest) 1 Year
Advertised rate
3.89%
Fixed - 1 year
Comparison rate*
4.96%
Monthly repayment
$1,178
Real Time Rating™

3.21 / 5

Compare
Breakfree Package Fixed Rate Home Loan (Low Doc) 2 Years
Advertised rate
3.99%
Fixed - 2 years
Comparison rate*
4.96%
Monthly repayment
$1,192
Real Time Rating™

3.31 / 5

Compare
Choice Package Tailored Home Loan (Interest Only) ($250k-$750k)
Advertised rate
4.92%
Variable
Comparison rate*
4.96%
Monthly repayment
$1,330
Real Time Rating™

2.77 / 5

Compare
Premier Package Low Doc Fixed Options Home Loan (Principal and Interest) 1 Year
Advertised rate
4.09%
Fixed - 1 year
Comparison rate*
4.97%
Monthly repayment
$1,207
Real Time Rating™

3.14 / 5

Compare
Choice Package Tailored Home Loan Fixed (Interest Only in Arrears) 3 Years
Advertised rate
4.29%
Fixed - 3 years
Comparison rate*
4.98%
Monthly repayment
$1,236
Real Time Rating™

2.74 / 5

Compare
Choice Package Tailored Home Loan Fixed (Interest Only in Advance) 3 Years
Advertised rate
4.19%
Fixed - 3 years
Comparison rate*
4.99%
Monthly repayment
$1,221
Real Time Rating™

2.82 / 5

Compare
Choice Package Tailored Home Loan Fixed (Principal and Interest) 4 Years
Advertised rate
4.59%
Fixed - 4 years
Comparison rate*
5.01%
Monthly repayment
$1,280
Real Time Rating™

3.06 / 5

Compare
Breakfree Package Fixed Rate Home Loan (Low Doc) 4 Years
Advertised rate
4.49%
Fixed - 4 years
Comparison rate*
5.02%
Monthly repayment
$1,265
Real Time Rating™

3.15 / 5

Compare
Breakfree Package Fixed Rate Home Loan (Low Doc) 1 Year
Advertised rate
4.09%
Fixed - 1 year
Comparison rate*
5.03%
Monthly repayment
$1,207
Real Time Rating™

3.1 / 5

Compare
Breakfree Package Fixed Rate Home Loan (Interest Only) 2 Years
Advertised rate
4.49%
Fixed - 2 years
Comparison rate*
5.04%
Monthly repayment
$1,265
Real Time Rating™

2.82 / 5

Compare
Premium Investment Loan Fixed 3 Years (Principal and Interest)
Advertised rate
4.54%
Fixed - 3 years
Comparison rate*
5.04%
Monthly repayment
$1,273
Real Time Rating™

3.29 / 5

Compare
Tailored Home Loan Fixed (Principal and Interest) 3 Years
Advertised rate
4.04%
Fixed - 3 years
Comparison rate*
5.05%
Monthly repayment
$1,199
Real Time Rating™

3.28 / 5

Compare
Breakfree Package Fixed Rate Home Loan (Low Doc) 5 Years
Advertised rate
4.59%
Fixed - 5 years
Comparison rate*
5.05%
Monthly repayment
$1,280
Real Time Rating™

3.07 / 5

Compare
Choice Package Tailored Home Loan Fixed (Interest Only in Advance) 2 Years
Advertised rate
4.19%
Fixed - 2 years
Comparison rate*
5.06%
Monthly repayment
$1,221
Real Time Rating™

2.62 / 5

Compare
Choice Package Tailored Home Loan Fixed (Interest Only in Arrears) 2 Years
Advertised rate
4.29%
Fixed - 2 years
Comparison rate*
5.06%
Monthly repayment
$1,236
Real Time Rating™

2.57 / 5

Compare
Premium Investment Loan Fixed 2 Years (Principal and Interest)
Advertised rate
4.34%
Fixed - 2 years
Comparison rate*
5.06%
Monthly repayment
$1,243
Real Time Rating™

3.24 / 5

Compare
Tailored Home Loan Fixed (Principal and Interest) 2 Years
Advertised rate
3.98%
Fixed - 2 years
Comparison rate*
5.13%
Monthly repayment
$1,191
Real Time Rating™

3.01 / 5

Compare
Choice Package Tailored Home Loan Fixed (Interest Only in Arrears) 5 Years
Advertised rate
4.99%
Fixed - 5 years
Comparison rate*
5.14%
Monthly repayment
$1,341
Real Time Rating™

2.25 / 5

Compare
Low Doc Fixed Options Home Loan (Principal and Interest) 3 Years (LVR 60%-80%)
Advertised rate
4.19%
Fixed - 3 years
Comparison rate*
5.15%
Monthly repayment
$1,221
Real Time Rating™

3.16 / 5

Compare
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Construction loans

It's a dream for many people to build their own home. You may expect that when you come to buy a property, you'll either buy one that has been lived in or buy one off-plan from a housing developer. If you're imaginative and prepared to take a few risks, you could as an alternative build your own home with the assistance of construction loans.

What is a construction loan?

In simple terms, it's a loan that you can use to pay for the cost of building your new home. It's usually a short-term loan and can be offered for a specific amount of time – generally around a year – giving you the time that you need to complete the build. When the build is finished, you'll have to pay off the construction loan by taking out a new loan, often known as the "end loan." That means you'll need to refinance at the end of the construction loan term, and many people have a standard mortgage at a fixed or variable rate to move things forward.

How does a construction loan compare to other similar products?

You need to look at rates, which are likely to be more expensive than an ordinary mortgage. That's because the lender doesn't have a tangible asset, just something that is expected to be constructed. It's hard for a lender to value this, and so if property prices in the neighbourhood fall or the builder doesn't do a good job, the lender could suffer from a poor investment. Banks and other financial institutions may be wary of lending for this type of loan, so you need to work on giving your potential lender confidence that the project will be successful.

What are the main features that you need to consider for a construction loan?

You need to know that you can afford it – you may only pay interest on the sums that a builder draws down from the loan, but you need to know that you can refinance at the end of your project and afford those payments. Your lender will want the involvement of a qualified builder and be provided with detailed specifications for the building, including what materials will be used, and a timescale. Expect to put down quite a large deposit as lenders will want to see that you are investing in the project as well as them. A good credit rating will help when lenders are weighing up whether or not to support you.

Are there serious risks?

There can be if you're not meticulously organised. Timescales frequently slip for construction projects, sometimes due to poor weather conditions, sometimes due to a builder not adhering to the project timetable. Delays can cost you money, so you need to tie everything up contractually as tightly as you can, including penalty clauses for delays. Make sure that the plans for the building are accurate and what you want, and take the time to discuss these in detail with your builder, and ensure that the lender also has them. Your reward at the end? Your own home, exactly how you want it, and a great asset for the future.

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^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

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