Construction Loan Interest Rates

Discussion in 'Loans & Mortgage Brokers' started by PRD_85, 12th Oct, 2019.

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  1. PRD_85

    PRD_85 Well-Known Member

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    7th Jan, 2018
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    Melbourne, VIC
    Hi all,

    I'm soon going to be applying for a construction loan for the build of 2 townhouses.

    Does anyone have any idea on the currently prevailing construction loan rate, and is this generally the same interest rate as a standard mortgage?

    From a brief look on loans.com.au / Canstar etc. the rate seems to be circa 3% - 3.5%.

    Can anyone confirm?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

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    Australia wide
    generally the same rates as non-construction loans.
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    Those rates are likely wrong, seeing as at least one of those townhouses will be an investment loans.com.au is showing a rate of 4.26% (ie. higher than average) and I dare say the rates you looked at are artificially low to get you to click through to an application/contact a lender directly only to find out you don't qualify for that specific product or similar.
    Important when funding Construction that you get the 'as-if-complete' valuation done upfront prior to any finance application to see if the deal is even do-able and what your LVR will actually be. Best to speak to a broker about your options.
     
    tobe likes this.