Completion– finishing touches, final plumbing, electricity, overall cleaning, and final payments for equipment and builders.Fit out – gutters, plumbing, electricity, plasterboards, and the partial installation of cupboards.Lockup – external walls, lockable windows, and doors.Frame – building the frames, partial brickwork, roofing, trusses, and windows.Slab – laying the foundation, levelling the ground, plumbing, and waterproofing the foundation.There are typically five stages of construction – here’s an example of a schedule:

The main thing that sets a home loan with a construction option apart from a standard home loan is the progressive drawdown structure of the loan.īefore construction begins, the builder, often with assistance from a lender, will prepare a document outlining the total cost of the build and split the overall cost it into stages which will inform the payment schedule. These are referred to as ‘progressive drawdowns’ or ‘progress payments’, meaning that rather than receiving your loan amount all at once in a lump sum, you may receive instalments of the loan amount as your build progresses through the various stages of construction. What is a construction loan option for your home loan?Ī construction option, sometimes referred to as a building option, is a type of home loan that is purposely structured for borrowers who are building or renovating their own home as opposed to buying an existing property.Ī construction option on your home loan gives you the funds to pay your licensed builder throughout the construction process or each stage of your renovation in chunks or instalments. Here’s a breakdown of how a construction option on your home loan works. Home loans with a construction option are a bit different to standard home loans – they’re structured around progressive payments during your build to help manage the project's cash flow, rather than borrowing a lump sum. While building your dream home is a big project, it gives you flexibility and freedom to construct something perfect for you, from paint to pavers – and everything in between. Finding a property that suits all your needs is not an easy feat.

Drawdown meaning in banking