If you have a standard home loan – without building conditions – you must draw down the total loan by a certain time. So what’s the difference? Let’s look at two $500,000 loans – one standard, one construction – to see how it works. Our construction loan is a standard home loan – with additional building conditions. This means you’ll be paying interest-only – and only on the amount you’ve drawn down. That’s why our loans begin with an interest-only period.

Our construction loans are designed to ensure you don’t draw more than you need – or exceed the construction costs you’ve budgeted for. Among other things, we’ll need to see the builder’s invoices as well as a progress claim certificate. We’ll pay your builder direct at each stage of the build (assuming you’ve met our requirements). A progressive drawdown – or progress payment – is the portion of your loan funds we release at each stage of construction. By allowing you to draw on your construction loan bit by bit as needed – known as ‘progressive drawdown’ – your interest payments are lower than if you borrowed the whole amount upfront.

You know what construction loans are and how they can help you navigate cashflow challenges of big projects it's time to understand progressive drawdown. But our construction loans (also known as building loans) take a lot of stress out of the equation. Building a home – or undertaking a major structural renovation project – can challenge even the best-laid plans.

Loan offer to drawdown