Resources

Construction loan

Our construction loan is flexible to suit your needs - whether you’re building or undergoing structural or major renovations. 

Unlike a loan to purchase an existing home, a construction loan has a different structure. Payments are released to your builder as they complete each stage of your construction. These payments are often referred to as progress payments.

During construction phase interest is only charged on the outstanding balance of your construction loan. This means if you have drawn down $200,000 of a $400,000 loan total, then your interest only repayments will be based on $200,000.

When construction phase is completed, your repayments will switch to principal and interest repayments.

Additional documents you need to supply
(Specifically for a construction loan) 

• Council-approved plans
• Fully executed industry standard fixed price building contract 
• Copy of the builder’s licence 
• Copy of the builder’s risk and indemnity insurance policy
• Copy of the home warranty insurance certificate  

The building contract

Your building contract will contain important information including the cost, terms of construction, and progress payment schedule for payments to be made to your builder.

Your progress payment schedule for construction will generally have 6 stages:

As each stage is completed, your builder will request payment for that particular stage. To make these funds available, you will need to authorise the payment and provide the required documents stated below. 

Documents required for progress payment: 

• A signed and completed ‘Progress payment request’ form from you 
• The builder’s tax invoice for that particular stage on official letterhead with their ABN

Additional requirements prior to the final progress payment: 

• A satisfactory inspection report from our valuer 
• A building insurance policy with Teachers Mutual Bank Limited noted as the financier  ;

Things you should know