Construction Loans are designed to help those who wish to design and build their own home, or make major renovations to an existing property.  So if you would rather build your own home, instead of buying someone else’s property which doesn’t have the design that you want, take a look at this loan.

The Loan Amount
The loan amount is determined using construction cost estimates, which come from quotes and tenders from builders, as well as council approvals and the amount of work estimated to be carried out by yourself or family and friends.  The lender will then approve the loan and you access the funds in stages, as each major part of the construction is finished.  

Repaying the Loan
You only pay interest on the funds which you have withdrawn, rather than the total loan amount, which offers an affordable way to finance the construction of the property.  Some construction loans will allow you to make small repayments during the construction phase, thereby reducing the principal and interest on the loan.

However, as the rate is variable, your repayments will go up during the construction phase if interest rates rise.  


Government grant for building your first home.
If this is your first home, then you can access the first-home owners grant.  The boost to the First Home Owners Grant is being phased out and as of 31 December 2009 will no longer be available.  However, the original first home owners grant of $7,000 is still available to eligible first home buyers.

The scheme is provided by the Federal Government and is aimed at helping first home buyers onto the property ladder.  The grant was increased as part of the government's stimulus package in 2008 but is now winding back to the original $7,000.

For more information on what you can claim as a first home buyer, contact your nearest mortgage broker.


Call and talk to Your Local Brisbane Mortgage Broker to find out if a construction loan would suit you and how to apply for the grant.  Call us on .