Construction loans

No, you cannot redraw during the construction period. If you choose a variable rate loan you will have a redraw facility available at the end of your construction period. 

Your loan will be disbursed as the funds are required, so you'll only pay interest on the portion of the construction loan you have drawn down. 

The only option for a construction loan is within our Basic Variable product.

The construction period of your loan will be interest only and the loan will revert to principal and interest repayments. For Investment you have the option of selecting whether you will have a further interest only period at the end of your construction period. 

The construction period for your loan is up to 24 months from the date of settlement. 

Yes, with our Basic Variable construction loan. By linking it to an offset account, you could save on interest. The money you have in your offset account will offset the amount you owe on your loan, and you'll only be charged interest on the difference.

Yes, there is an additional once-off upfront fee for progress draws of $400. This covers all required progress payments during your construction period. For full details refer to our Fees & Charges document. 

Progress payments let you draw down on your construction loan progressively, so you can pay your builder at key stages during the construction period. You’ll only pay interest on the funds you’ve used. Before your final progress payment is made, a satisfactory valuation from one of our valuers must be completed. This confirms that the build has been carried out as per the original submitted plans.

Fixed price building contracts are most common for construction loans. Other types of contracts may be considered, but please reach out to us to confirm. 

If you’ve chosen a registered builder, you may be asked to provide:

• A signed copy of the Industry Standard Fixed Price Contract
• A copy of building plans and council permits 
• A copy of the builder’s licence
• The builder’s bank account details
• Copies of insurance policies, including Builders All Risk/Public Liability Insurance, Domestic/Home Warranty Insurance, and Public Liability Insurance 

The standard stages of construction are: 
 
1. Preparation – plans, permits, fees, insurance, etc. 
2. Foundation – levelling the land, laying the slab, excavations, plumbing, etc. 
3. Framing – constructing walls, roof trusses, windows, door frames, etc. 
4. Lock-up – adding everything you need to turn your building into a house and locking it up. 
5. Fix-up – plastering, sealing, adding your appliances, bathroom installed, etc. 
6. Completion – site tidied, fences up, and builders receive final payment. 

Yes. If you are buying land without a building contract, you can apply for a regular home loan. Then when you’re ready to build, reach out to us and we can help. If you are buying a house and land package, you can get a construction loan. The first drawdown would be for the purchase of the land, and progressive drawdowns would cover the building stages. 

If you have enough equity in your property to cover the demolition costs and the new build, you may be able to borrow the funds. Otherwise, you will need to use your own savings to cover the cost of demolition before the construction can commence. 

No. If you want to borrow money for more than just the build (for curtains, blinds, furniture, appliances and so on), you may need a separate loan. Talk to us about your options. 

Make sure to get home insurance before the final payment stage. We’ll need to confirm the house is insured before making the final payment to your builder. To show this is complete, send in a copy of your home insurance certificate with your final drawdown request. 

Yes. People First Bank are a Housing Australia authorised Participating Lender and a construction loan is one of the options customers can consider as part of this Australian Government initiative.