What is a construction loan?
As your builder completes the different stages of the home building process, a construction loan gives you the funds to pay them as they complete each stage. These are known as progress payments.
Why choose HomeStart for your construction loan?
Whether you’re a first home buyer looking for a house and land package with one of our partner builders or looking to buy your own block of land and choose your licensed builder, we have different construction loan options to suit your situation and your needs.
How does our construction loan work?
Our low deposit construction loan options are available through our HomeStart Loan or Graduate Loan.
Both loans offer flexible interest rates and repayment options and are available when building a home in South Australian, for residential use only.
To learn more about these loans go to our home loans or get in touch with us.
Features and benefits of our construction loan
No loan repayments for the first 12 months or until your home is built, whichever comes first.
This means you don’t need to cover loan repayments as well as rent or other payments on your current home.
Save on stamp duty costs
When you build, you only pay stamp duty on the land, but you may be eligible for Stamp Duty Relief if you’re a first home buyer. If you’re not a first home buyer, paying stamp duty on just the land can be much less than what you pay on an existing home.
Reduce the amount you need upfront for your deposit with the First Home Owner Grant and Stamp Duty Relief
First home buyers may be eligible for the First Home Owner Grant (FHOG) of up to $15,000 if you buy a new home or build. We will help you apply for this grant, which can be put towards your deposit, fees and charges. Go to Revenue SA to find out more.
Be aware of when you might expect to receive the First Home Owner Grant. If you buy vacant land you may not receive the FHOG until you commence construction. Check with Revenue SA for the latest information.
Choose to buy land now, build later or buy a house and land package
If you wish to select your own licensed builder, you can buy a block of land now and build on it at a later stage. This gives you an opportunity to save money and reduce your home loan balance by the time it comes to build.
Boost your borrowing power
If you meet HomeStart’s eligibility requirements, you may be eligible for one of our additional loans which can help boost your borrowing power and cover upfront costs, getting you into your own home, sooner. Find out more about our home loans.
2% deposit Construction Loan
By selecting a house and land package with one of our partner builders and combining it with a HomeStart Loan or Graduate Loan, you could be eligible for a 2% deposit construction loan and reduce the costs to build.
With a house and land package you can choose one of many standard or customised home designs at the same time you purchase the land.
Please note this information does not constitute financial advice. It is the purchaser’s responsibility to seek independent advice as to whether a house and land package suits their financial situation and needs.
How to apply?
Explore house and land packages with our partner builders. Contact them directly to learn about HomeStart's low upfront cost home loans or reach out to us for more information.
Additional Benefits with our Partner Builders
Alongside the usual benefits of our construction loans, building with one of our partnered builders on the 2% construction loan offers additional benefits:
Fixed price
Our partner builders will commit to a fixed price, prior to the approval of the loan for your new home.
Less progress draws
Builders usually claim 6 progress payments (drawdowns) for the work completed during the construction process. Each payment adds to the interest cost of the loan. When you combine a HomeStart Loan or Graduate Loan with a house and land package from one of our partner builders, there are usually only 3 progress payments, which could save you thousands in interest.
Lower deposit
With just a 2% deposit to build, you don’t need to wait as long to save for a deposit, meaning you can start building the home you want sooner.
What if I don’t want a house and land package with a partner builder?
You can purchase your land and choose your own builder. Or you can select a house and land package with other licensed builders through our Graduate Loan or HomeStart Loan.
You can start with as little as 5% deposit plus upfront costs to build with a Graduate Loan and 8% deposit plus upfront costs to build with a HomeStart Loan.
If you're a first home buyer, you may still be eligible for the First Home Owner Grant and Stamp Duty Relief. You will need to check your eligibility with Revenue SA.