The demand for new homes and home renovations has seen Aussie Home Loans
launch a new loan product – the Aussie Optimizer Construction Loan.
The new construction loan starts at a 4.74% variable rate for loans of up to $750,000.
The launch comes after data published in May by the Australian Bureau of Statistics revealed that the number of construction loans have lifted by 20% in the last two years.
"We have deliberately created a low cost loan to help renovators lift the value of their homes or apartments or perhaps to meet their changing needs without having to move. The loans are also great for new home builders," Susan Davidson, head of Aussie Home Loans
“Interest is only charged on the amount drawn down, and loan repayments are interest only during the construction period providing comfort and security to renovators and home builders who have to make progress payments throughout the work.”
The new product comes on the heels of a forecast by Master Builders Australia, predicting home renovations are set to boom over the next three years – with housing additions expected to increase by 15% in value per annum on average over the forecast period to 2016/17.
The loan is only available in metropolitan areas and has a maximum LVR of 90% for loans up to $500,000, and 80% for loans up to $750,000.
Progress payments are made at each stage of construction. As a guide, there can be up to five progress payments from slabs being poured through to practical completion. The loans can also work in conjunction with First Home Owner Grants in every state and territory. The loans, however, are not available for owner builders, kit or demountable homes.