An AFM Construction Loan Could Work For You
An AFM construction loan is ideal if you’re planning to build a new property, or purchase land with the intention of building. Construction loans are structured differently to home loans for existing properties where the entire loan is drawn down at settlement. With an AFM construction loan, progress payments are made at various times throughout the construction process. Payments are usually made at the deposit, base, frame, lock up, fit-out and final completion stages. This progressive draw down structure means you only pay interest on the portion of the loan that has been paid out.
Construction Loan Process
Building or renovating your home doesn’t need to be a complicated process, we explain each step in more detail.
It’s a good idea to apply for conditional or pre-approval when you require a construction loan. This way your lender can check your financial situation and make a formal assessment on whether you can afford to make repayments on the amount you’d like to borrow.
To apply for conditional approval, you will need to supply the following supporting documentation:
- Identification documents such as your birth certificate, passport, driver’s licence or citizenship certificate
- Proof of income like payslips, tax assessment & evidence of any other income
- Evidence of assets & liabilities such as motor vehicle registration or credit card statements
- Copies of your bank statements
Not sure where to start or want to know which properties are in your budget?
Try our borrowing power calculator to see how much you are eligible to borrow:
Key Construction Loan Features
100% Offset Account
Save on interest by attaching a 100% offset account to your home loan.
Borrow up to 95%
Depending on how much deposit you have saved, you can borrow up to 95% of the property value.
Flexible Loan Repayments
Have the option to pay the principal and interest during and after construction, or you can take advantage of interest only repayments while construction is in progress (up to a maximum of 12 months)
Renovate or Build
Our construction loans are not just for building a new home, you can apply for a construction loan to assist with the completion of major home renovations as well.
First Home Owners Grant
If you are a first home buyer, we will release the First Home Owners Grant once your land has settled giving you more breathing space when it comes to the funds you’ll need to complete the rest of the construction.