Rate Money launches new construction loan

Branch to manage progress payments

Rate Money launches new construction loan


By Ryan Johnson

Self-employed home loan specialist Rate Money has launched a new construction loan to its product suite in a bid to increase access to funding for Australia’s 2 million small businesses.

The alt and full doc construction loan solution, named the Elevate Construction loan, is a 30-year loan term that includes an additional 18 months for construction, a feature Rate Money CEO Ryan Gair said is not typically included by other lenders.

“The challenging environment for private dwelling construction continues, with approvals at levels unseen since 2013, due to stringent lending criteria and economic headwinds,” Gair said.

“In every challenge lies an opportunity, and at Rate Money, we're passionate about turning those opportunities into realities. Elevate Construction is more than just a loan; it's a gateway to build that dream renovation or new build that has been out of reach for many.”

While nearly half of Australia’s SMEs expect a downturn in turnover by 2025 due to increasing economic pressures, most (54%) still foresee the need to invest more in their businesses.

However, due to the challenges of the market, Gair said alt doc options are currently rare for creditworthy self-employed who don’t have readily available financials. 

“We’re giving more self-employed access to the product, with market leading interest rates and lower fees,” Gair said.

Rate Money’s green discount

Building on Rate Money’s commitment to environmentally responsible lending practices, the loan also features a green discount, whereby properties meeting or exceeding NatHERS 7-star rating will be eligible for a 0.20% green discount on the standard rate.

The government-developed Nationwide House Energy Rating Scheme (NatHERS) assessments are the most common way to meet the minimum energy efficiency requirements of the National Construction Code (NCC).

Energy assessors use NatHERS computer modelling tools to predict the amount of heating and cooling a dwelling will need to stay comfortable year-round. This is based on the home’s design, materials, and construction, including:

  • layout of the home and its orientation
  • roof, walls, windows and floor, construction methods and materials
  • shading from the sun's path and how well it takes advantage of local breezes

The findings are converted to a rating between 0 and 10 stars, which is specific to the dwelling.

“We’re committed to environmentally responsible lending practices.  We’re passing on the Government’s incentives via our discount,” Gair said.

Branches to manage progress payments

The Elevate Construction loan also simplifies the process for referral partners by managing progress payments, a significant advantage for mortgage brokers.

“Most other lenders require mortgage brokers to manage these requests for their clients,” Gair said. “It can be time consuming given there can be up to six stages. Our branches do this on behalf of the broker.”

With over $7 billion in settlements in just under five years, Gair said Rate Money prides itself on its product innovations across the portfolio, including eliminating clawbacks, application fees, valuation fees and risk fees.

“We are unwavering in our commitment to addressing the unique needs of this often-overlooked demographic,” Gair said.

“Our franchise business model is strengthened by these innovations, equipping them and our referral partners with the tools to widen their customer base and service different segments of the self-employed market.” 

What do you think about Rate Money’s new product? Comment below.

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