Understanding Construction Loans in Australia (Melbourne)

A construction loan provides funding in instalments aligned with build milestones - rather than a single lump sum. Each progress payment is made after the builder completes a defined stage, keeping interest costs manageable.

Key considerations include:

• Progressive Drawdown Fees: charged when funds are released.

• Valuations: lenders typically use “as if complete” valuations to determine borrowing capacity.

• Documentation: council plans, building contracts, and cost breakdowns are required.

• Repayment Options: most borrowers opt for interest-only repayments during construction, transitioning to principal and interest after completion.

Our role is to simplify every step, from preparation and application to settlement and post-completion structure.

Why the Right Construction Loan Matters

A construction loan isn’t like a standard mortgage. The right loan should:

• Match your drawdown schedule and budget.
• Offer flexibility for progress payments and changes.
• Keep interest costs aligned with build timelines.
• Support your future plans once construction is complete.

At Traj Finance, we make sure your loan structure grows with your project - not against it.

We'll help you fund your new build or renovation

At Traj Finance, we understand that embarking on major home renovations or constructing a new build can be both an exciting and intricate process. Our focus is on helping business owners, professional services employees, and high net worth individuals across Australia access Construction Loan options from banks and lenders nationwide. These loans are tailored for projects like buying off the plan or when you need to demolish an existing property to create your dream home. Whether you’re a registered builder, plumber, or electrician, we’re here to assist you in making informed decisions about your construction financing needs.

When considering a Construction Loan, it's important to factor in several key elements. One of the main benefits is the progressive drawdown structure, which means you only pay interest on the amount drawn down. With this arrangement, you can manage cash flow efficiently as funds are released in line with construction milestones. Interest-only repayment options during the build phase can also alleviate financial pressure until your project is completed. The Progressive Payment Schedule allows for payments to be made in instalments at various stages of the project, ensuring your sub-contractors and suppliers are paid promptly.

Applying for a loan with Traj Finance is designed to be straightforward. We offer a streamlined application process that considers your unique situation. Understanding council plans, permits, and council regulations is crucial for commencing building within a set period from the Disclosure Date. Our team will guide you through the development application process, ensuring that you're fully prepared and compliant with all necessary requirements.

Choosing the ideal location and suitable land is another crucial step in the construction journey. Whether you're looking to build within a particular price range or need to consider specific council restrictions, having a clear plan is essential. We can help assess ‘as if complete’ valuations to ensure that your project remains financially viable from start to finish. For those dealing with Out of Contract Items not included in the original agreement, we provide advice on managing additional payments effectively.

Before finalising your Construction Loan, it’s vital to consider the Progressive Drawing Fee and how it might affect your overall budget. This fee is applied each time funds are drawn down and should be factored into your financial plan. By working closely with our team, you can ensure that every aspect of your loan is considered, allowing you to focus on achieving your construction goals.

At Traj Finance, we aim to support our clients through every stage of their construction journey. Our expertise in Construction Loans ensures that high net worth individuals and businesses alike can achieve their property aspirations without undue stress. If you’re ready to explore how our services can benefit your next project, contact us today. Let us help you make informed decisions and bring your construction vision to life.