Construction loans in Melbourne
Property finance
Construction loan broker in Melbourne's west
A construction loan is a home loan that pays your builder in stages, called progress payments, as your new home is built, and you typically only pay interest on the amount drawn down during the build. It suits people building a new home or taking on a major project. Attain Loans works with borrowers across Melbourne's west, comparing construction loan options across our 70+ lender panel. Planning smaller works? See our home renovation loans.
Unlike a standard home loan that provides funds in a lump sum, a construction loan releases funds in stages as your build progresses. At Attain Loans we will help you find the right construction loan to suit your project and help you build your perfect home.
Book a consultationConstruction loan progress payments
Construction loans are paid out in stages, known as progress payments or drawdowns. These typically align with the main stages of construction:
- Slab down or base stage
- Frame stage
- Lock-up stage
- Fixing stage
- Completion stage
Interest-only during construction
During the construction period, you typically only pay interest on the amount drawn down. Full principal and interest repayments usually begin once construction is complete.
Loan term
The loan term is usually divided into two periods:
- Construction period: Generally up to 12 months
- Standard home loan period: Usually 25-30 years
How to get a construction loan
At Attain Loans we always put your best interests first. We'll help you find a competitive rate and loan structure that suits your construction or major renovation project, from our lender panel.
In most cases there is no charge to you because the lender pays us a commission, which can vary between lenders. We disclose this before you proceed, and when arranging a home loan we must act in your best interests.
1
Getting to know you
We're flexible to fit in with you. We can do face to face, phone, or video call meetings. We're flexible on times and can do after hours and weekend meetings by request.
2
Researching your options
We research your loan options, comparing rates and features. We present the options that suit your needs and help you select the most suitable loan.
3
Choosing a lender
We always represent your best interests and consider your needs when recommending a lender. Once we all agree on the most suitable option we will prepare the application paperwork and request supporting documents from you.
4
Loan approval
We monitor the application's progress, address any lender concerns, and work towards formal loan approval (subject to lender assessment).
5
Settlement and Construction
We coordinate settlement, explain the drawdown process, and assist with progress payments during construction.
Construction finance questions
Get in touch and we will help you with any questions you have about construction loans and advise on the best approach for you and your building project.
Let us help with your questionsHow do construction loans accommodate for potential building delays or cost overruns?
Construction loans typically include a contingency buffer of 5-20% to account for unexpected costs or delays. If significant overruns occur, you may need to negotiate with your lender for additional funds. Some lenders offer more flexible terms that allow for extensions of the construction period without penalties, but this varies between financial institutions.
What are the implications of land value fluctuations during the construction period on the loan-to-value ratio (LVR)?
Land value changes during construction can affect your LVR, which may impact your borrowing capacity or trigger the need for Lenders Mortgage Insurance (LMI). If values increase, you might gain equity, potentially improving your position. Conversely, if values decrease, you could face challenges if you need to refinance or access additional funds. Lenders typically reassess property value at key stages of construction.
How do lenders assess the viability of a construction project when determining loan approval?
Lenders evaluate several factors including the builder's credentials and financial stability, the complexity of the project, your financial position, and the projected final value of the property. They often require detailed plans, council approvals, fixed-price building contracts, and independent valuations. Some lenders also consider the location and potential resale value of the completed property.
What strategies can borrowers employ to optimise their construction loan structure for tax purposes?
For investment properties, you may consider structuring your loan to potentially maximise tax-deductible interest. This might involve using an interest-only period during construction and maintaining a separate loan for the land portion. For owner-occupiers, you might explore options to make the most of any available First Home Owner Grants or stamp duty concessions (eligibility criteria and caps apply). Speak with your accountant or tax adviser about your circumstances.
How do construction loans handle progress payments for off-site manufacturing or prefabricated building elements?
Many traditional construction loans are designed around on-site building progress. For projects involving significant off-site manufacturing or prefabrication, you may need a specialised construction loan product. Some lenders offer more flexible progress payment schedules that can accommodate payments for off-site work, but this often requires additional documentation and may involve stricter lending criteria.
What are the implications of changing builders mid-construction on your loan agreement?
Changing builders during construction can have significant implications for your loan. It often requires lender approval and may necessitate a loan restructure. You'll likely need to provide a new building contract, updated costings, and potentially a new valuation. This process can lead to delays and possible changes in loan terms or conditions. Some lenders may even consider this a default event, so it's important to communicate with your lender early if you're considering a builder change.
How do construction loans account for sustainable or energy-efficient building practices?
Some lenders offer 'green construction loans' with more favourable terms for projects meeting specific energy efficiency or sustainability standards. These might include lower interest rates, reduced fees, or higher borrowing limits. The loan assessment may consider long-term cost savings from energy-efficient design, potentially improving borrowing capacity. However, you may need to provide additional documentation to prove the sustainable aspects of your build.
What are the considerations for construction loans on properties with multiple dwellings or mixed-use developments?
Construction loans for multi-dwelling or mixed-use properties often have more complex assessment criteria. Lenders may require additional documentation, including council approvals for multiple dwellings, projected rental income for investment components, and more detailed feasibility studies. The loan structure might involve separate components for different aspects of the development. These loans often have higher interest rates and stricter LVR requirements compared to single dwelling construction loans.
How do lenders manage the risk of builder insolvency during the construction period?
Lenders typically require builders to have current insurance policies, including home warranty insurance, which provides some protection against builder insolvency. They may also conduct regular checks on the builder's financial status throughout the construction period. In the event of builder insolvency, the loan agreement usually allows for a replacement builder, subject to lender approval. Some lenders may offer additional protections or support services to help borrowers navigate this situation.
What options are available for borrowers who want to act as an owner-builder, and how does this affect the loan assessment process?
Owner-builder construction loans are available but often come with stricter lending criteria. Lenders typically require evidence of your building qualifications or experience, detailed project plans, and cost breakdowns. The LVR is often lower for owner-builder loans, sometimes capped at 60-70%. You may need to provide additional security or guarantors. The assessment process is usually more rigorous, focusing on your ability to complete the project on time and within budget. Some lenders may require stage inspections by independent experts to ensure construction quality and progress.
How does a construction loan work?
Instead of receiving the full amount upfront, a construction loan releases funds in stages, called progress payments or drawdowns, as your builder completes each stage, such as slab, frame, lock-up, fixing and completion. During the build you typically pay interest only on the amount drawn down, and full principal and interest repayments usually begin once construction is complete. Lenders often reassess the property at key stages, and cost overruns may need to be covered by your own funds or further lender approval.
Do you need a deposit for a construction loan?
Generally, yes. Lenders usually need a deposit or equity in the land or another property, plus funds for costs outside the building contract. If you borrow a high proportion of the property's value, Lenders Mortgage Insurance (LMI) may apply, and owner-builder loans often have lower LVR limits, sometimes capped at 60-70%. Lenders will also assess your income, your builder and the fixed-price building contract. We can help you work out what's required before you sign.
Can a construction loan be used for a major renovation?
Often, yes. Some lenders offer construction-style loans for major renovations and extensions, releasing funds in stages as work progresses, similar to a new build. Lenders typically want detailed plans, council approvals where needed, a building contract and a valuation of the property's expected value after the works. Borrowing more increases your debt and repayments, so allow a buffer for cost overruns. For smaller projects, a different type of loan may suit better.
Your full financial situation and requirements need to be considered prior to any offer and acceptance of a loan product. The information contained in this website is of a general nature and does not take in to account your personal needs and requirements.
Construction and home loan guides
Why choose Attain Loans?
At Attain we specialise in construction financing and understand the intricacies of the loan process. We liaise with the lenders throughout the building process and plan for the transition to a standard home loan once construction is complete. Making sure you get to build your perfect home as smoothly as possible.
We're family
We are a small family owned, Altona based business that understands your needs at different stages of your life.
We listen
Identifying your goals and finding services and products that meet your needs is our number one job, and we love it!
22 years industry experience
We know the intricacies of the mortgage market and can tailor mortgage solutions for your individual needs.
We have access to the very best lenders
Over 70 of them, including the majors. We're accredited, which means we are fully trained and know all the best options available for you.
Ongoing support
Even when we've found you a great deal we undertake regular reviews to see if we can find you something even better.
We're awesome!
We have an honest, client focused business model and we aim to create long lasting relationships built on trust and respect.
Our happy customers
Financial security gives you choices. It lets you move home, learn new things, travel, or start and grow a business. When you're financially secure, you can focus on what's important. Your family, health, and personal growth.
Owen
Chrystal has been absolutely amazing from start to finish. As a first time home buyer I had little understanding of the whole process and was quite overwhelmed. Chrystal took the time to thoroughly explain all aspects to me and was always available whenever I had any questions and made the whole process much less stressful. I highly recommend her to anyone looking for a mortgage broker.
Danny Simpson
Chrystal was incredible throughout the entire process. She helped me review numerous listings, connected me with a great conveyancer and building inspector, supported me on auction day, and found the best home loan to suit my needs while guiding me through the details. Overall, I highly recommend Attain Loans for going above and beyond!
Macca Playz
Chrystal's outstanding performance throughout the process was truly impressive. Her assistance in reviewing various listings, arranging introductions to a trusted conveyancer and building inspector, providing support, and sourcing a home loan that met my specific needs while offering detailed explanations of the terms, was truly exceptional. I strongly recommend Attain Loans for their outstanding commitment to customer satisfaction and service excellence.
Emma Kirkham
I went to Attain Loans to reduce my mortgage repayments and secure financing for a truck-mounted EWP. Chrystal went above and beyond to ensure I got the best deal possible. She took the stress out of the process and made everything happen smoothly. Thanks to Chrystal, I was able to combine my home and truck loans and even purchase a brand-new car—all while paying much less than I ever imagined. I highly recommend Attain Loans. It’s Chrystal’s personal touch and dedication that make her exceptional at what she does!
Ian Martin
We were introduced to Chrystal and Attain Loans by a mutual colleague and we are very pleased that we were. Chrystal is an absolute finance whizz and a diamond of a lady. She is thorough, professional, patient, 'on your side', and will work her hardest to get the job done for you. We are pleased to have met Chrystal and have her setup our home loan and finances for us, and we will continue to work with Chrystal for any of our finance needs in the future.
Nichie S
Chrystal Evans, Director & Mortgage Broker at Attain was truly a lifesaver. In a stressful time where I needed assistance and some advice, Chrystal was this and more for me. Her knowledge of the banks, packages, fees etc. and advice was excellent, giving me confidence while also making everything really easy. Lastly her follow-up and communications were solid, I would highly recommend Chrystal. Also, after trying to negotiate an interest rate after coming off a fixed rate with my bank, where I was told they couldn't help me and spoke with 3 different people with wait times on the phone, I will not deal with a big bank again and only with Chrystal/Attain.
Cindy Kelly
Chrystal and Attain Loans were instrumental in assisting us to secure our dream home. Chrystal’s professionalism, knowledge and high level skills secured us the best loan for our needs. Chrystal is very thorough and assisted us through the whole process, from finding the best loan to ensuring everything was in line and ready for settlement day. We will definitely utilise Chrystal’s expertise for our next property purchase and highly recommend Chrystal and Attain Loans.
will miller
Chrystal and her team are amazing to deal with extremely helpful and couldn't ask for better service. Chrystal and her team have helped us secure our first home and we have now settled. Chrystal is still working with us through every stage of the project. It's great to know that I had Chrystal on hand anytime I needed direction and advice. Thanks heaps guys from will and Zoe miller
Nikola M.
Chrystal is by far the best broker I’ve met. Not only she found a great rate and conditions, she advised me on how to restructure the loans to get a better return down the road. Definitely recommend her, won’t even think of going elsewhere.
Renee Blake
Chrystal and her team @ Attain Loans are amazing. Chrystal makes the whole process so easy and understandable. She always has her clients needs at the forefront of her mind and does everything possible to help. Not only is she an AMAZING broker with integrity, she is reliable with a client first focus. If I could score her 100 I would. The only broker for me.
Callan Applebee
The best! Highly recommend for those lookong for people that care and honesty in financial requests for mortgae and loan services. From someone who has just begun owning land and building a home, all I can say is that Chrystal and her amazing team have held customers like myself and my wife at the forefront. We are still in the process and this company and its ideals and staff are and continue to be amazing. The trust, confidence and support model they uphold is something that all other institutions should refer to. Thank you Chrystal and your team members for everything thus far. I look forward to our continued relationship and your growth. Thank you.
Vanessa Terekia
I have had the pleasure of working with Chrystal who helped to get my home loan approval. This women went out of her way to help me above and beyond my expectations, I was so ready to give up on a few occasions but she wasn't going to let me and I could not thank her enough for all of her efforts. I am now in my own home thanks to Chrystal and her team, I would always recommend her service, its like no other :).
Skruffy Inc
If it's a no fuss, simple process you're after - then Chrystal is your go to! As a first home buyer I was totally out of my league, everything was foreign. Chrystal quickly established a rapport and from the beginning I felt secure in her expertise and genuine interest to help me realise my goals. Whenever there were things that I wasn't quite sure about, Chrystal jumped in and took the reins without hesitation. When investing in one of the biggest purchases in your lifetime, having someone you trust at the helm is everything! Chrystal is that someone. Her easy going nature coupled with the depth of knowledge, experience and professionalism is second to none! I can't recommend her highly enough. Appreciate your support solution oriented outlook Chrystal. Thank you so much! Whakamānawatia koe, ka tika! Nāku noa Trish Brisbane, QLD
Suzanne McHugh
Chrystal was fantastic, she took the time to help us urgently obtain finance after not getting any help directly from the banks. She was very informative, was able to explain all the details. We would not have been able to have a successful bid without her help.
Luke Applebee
Thanks to the incredibly hard-working team at Attain (Chrystal and Pam) we were able to settle literally days before Christmas last year in our first home. At every step of the home buying journey we were well informed and felt like our interests were always the top priority. It was a stressful time for us to keep up with the paperwork and everything however Attain did a superb job at keeping us on track (and sane). If you have no idea where to begin if you're looking at purchasing a home, I highly recommend giving Attain a call. Excellent customer service and ongoing support. We have recommended Attain to family and friends, too. Absolutely impressive team. Can't thank them enough.
Jessica Joy
I cannot recommend Attain Loan & Mortgage Services enough. As a first home buyer I was nervous with very limited knowledge of how the entire loan process worked. Chrystal made it absolutely seamless and took all of the stress out for me. 12 months on, they assisted me with my first re-finance and again were there for me every step of the way. I couldn't be happier and wouldn't trust anyone else! Thankyou so much! Positive Responsiveness, Quality, Professionalism, Value
Jessica Winter
Chrystal, Pam and the team at Attain loan & morgage services are the best brokers in business. They literally held our hands throughout the whole process of our home loan. And we were not easy customers! They went above and beyond to help us get the best outcome in the process of attaining our first family home. Their attitude, customer service and professionalism was second to none. Couldn't recommend this company more! They literally did all the HARD work for us and made the process stress free :) Thanks Team!! Jessica Winter
Americar Auto
I've been using Attain Loans for years. Each time Chrystal has helped us get the loan through, being a small business can be tricky sometimes but Chrystal never gives up and always gets a result. I would give her a higher score if I could :)
Gary Capeling
My wife and I were in a vendor finance agreement and due to some financial hardship issues brought about by the Covid pandemic not looking like we would ever be able to get ahead. The team at Attain Loans helped steer us in the right direction to be able to finally have a mortgage of our own and also clear up our debts and hopefully repair our credit issues. I would definitely recommend them to anyone looking to just refinance or that is in a similar boat to us! 10 out of 10 for these guys!
Rebecca Smith
Excellent communication throughout entire process. Second time we have obtained finance through Chrystal and would use her again.
Peter Sz
Chrystal and the team from Attain Loan & Mortgage Services, 14 Harrington Square, Altona, VIC, 3018, Were a pleasure to deal with, they provided us with great service and prompt settlement, our circumstances were delicate and they worked though the steps to help us achieve the results desired, We would highly recommend Attain Loan & Mortgage Services for all your home loan needs, Thanks for all your help Peter
Lisa L
I recently bought a new house and usually the process can be quite stressful. Luke made everything run smooth from start to finish and got me a good rate! Highly recommend
Ray Jensen
Got the job done that no one else could!!!!! Very happy customer, thanks for all your all help……