Construction Loans

Building your own home or starting a major structural renovation is an exciting journey, but it requires a specialized financial approach. Unlike a standard home loan where you receive a lump sum at settlement, a Construction Loan is designed to grow with your build.

At Classic Loans, we help you manage the financial logistics of your construction project, ensuring your builder is paid on time while you save on interest during the process.

How a Construction Loan Works

The defining feature of a construction loan is the Progressive Drawdown (or Progress Payments). Instead of paying interest on the full loan amount from day one, your lender releases funds in stages as specific milestones of the build are reached.

The 5 Standard Stages of Construction

Most builds in Victoria follow a structured payment schedule:

Slab (Base) Stage:Funds for laying the foundation, plumbing, and waterproofing.
Frame Stage:Funding for the internal and external support structures, roofing, and trusses.
Lock-up Stage:Released when windows, doors, and external walls are installed, making the house “lockable.”
Fixing (Fit-out) Stage:For internal fittings, plasterboard, electrical, and plumbing “rough-ins.”
Completion (Final) Stage:The final payment for painting, detailing, cleaning, and handing over the keys.

The Australian property market can be intimidating for first-timers. We take the stress out of the equation by:

Calculating your true borrowing power.
Assisting with First Home Owner Grants (FHOG)and stamp duty concessions.
Explaining the difference between fixed, variable, and split interest rates.

Your home is likely your biggest investment. If your property has increased in value, an Equity Release allows you to access that cash without selling. Use it to:

Fund a major home renovation.
Provide a deposit for an investment property.

Consolidate high-interest debts into one lower rate.

Building a new home requires a specialized loan structure. Unlike a standard mortgage, a Construction Loan involves “progress draws,” where the bank pays your builder in stages (Slab, Frame, Lock-up, etc.). We manage the coordination between you, the lender, and the builder to ensure a smooth construction process.

If you run your own business, your tax returns might not tell the whole story. At Classic Loans, we are experts in Alt-Doc (Alternative Documentation) loans. We work with specialist lenders who understand business owners, allowing you to secure a home loan based on your actual cash flow and business performance.

Loans

Contact Us

0451 269 825

preet@classicloans.com.au

Clyde, Victoria ( 3978), Australia

Key Benefits for Builders & Homeowners

Applying for a construction loan is slightly more document-intensive than a standard loan. To get your approval moving, Preetinder Singh will help you organize:

You only pay interest on the portion of the loan that has been drawn down. If you have a $600,000 loan but have only used $100,000 for the slab, you are only billed for the $100,000.

During the construction period (usually up to 24 months), most lenders offer interest-only repayments. This keeps your cash flow healthy while you might still be paying rent elsewhere.

Lenders often require an inspection before releasing funds for the next stage, providing an extra layer of oversight to ensure the work is actually completed to standard.

Construction Loans