Building or renovating? Consider a construction loan.
A construction home loan is set up differently from a normal home loan. It’s typically a variable rate loan whereby progress payments are required once each stage of the home is completed.
Depending on the timing, you may need to settle on the land first then proceed with the build separately. So you will probably have two loans – one for the land and one to construct the home. During construction, the builder presents a progress payment to the bank following completion of each one of the usual five stages:
Laying the slab
Roofing and tiling
Repayments are generally interest-only during the construction period, converting to principal and interest on completion of the home.