Building your home with a Construction Facility

A simple walk-through of how your finance works while your home is being built — and what we’ll need from you along the way.

Congratulations on starting your build! A construction facility works a little differently to a normal home finance facility, because the money is released bit by bit as your home goes up — not all at once. This guide explains everything in plain language: how the payments work, what we’ll need from you, and what happens when your home is finished.

How does it all work?

• When your finance settles, we set aside all the money needed to build your home — the amount agreed in your fixed price building contract.
• Your home needs to be finished within 12 months of settlement. If it takes longer, extra charges may apply, and there may not be enough money left for the final payment. If there’s a shortfall, you’ll need to cover it before we can make that final payment.
• As each stage of the build is finished, your builder sends us an invoice and we pay them directly. Each invoice can’t be more than the amount set for that stage in your contract.
• These stage-by-stage payments are called Progress Payments.
• We can only pay your builder the amount we set aside at settlement. If the build ends up costing more, you’ll need to pay the difference before we release any more funds — and we’ll need proof from your builder that it’s been paid.

Can I make changes to my building contract?

Yes. If you and your builder agree on a change (this is called a variation), we can usually include it — as long as we approve it when we formally approve your finance. There are two ways this works:

There are two ways to make this work:

1. Change built into the payment schedule

– We pay it as part of the normal stage payments.

2. Change added on top

– We pay it after all the normal stage payments are done, once your builder sends an invoice for it.

If a change doesn’t fit either of these, or you agree to it after your finance has settled, you’ll need to pay for it yourself.

What will I pay during the build?

• For the first 12 months you’ll make rent-only payments. These are worked out on the balance owing each month and taken from your nominated account. (Rent-only means you’re not paying down the balance yet — that part starts later.)

What happens when the build is finished?

• Your account stays a Construction Facility on rent-only payments until you reach the 12-month mark from your settlement date.

What happens after 12 months?

• Your facility automatically becomes a standard home finance facility. Your payments change from rent-only to also paying down the balance (principal and rent reduction), based on what you owe and the current rate over the rest of your term.

How stage payments work

Your total build cost is split into stages. The amount paid at each stage follows HIA standards (the Housing Industry Association’s standard payment stages e.g slab, fixing, lock-up etc). If your schedule doesn’t match these, we’ll need to approve it first.

These stages are part of your building contract, so we follow them exactly when releasing money. Your builder’s invoices need to match the approved percentages. We can’t pay an invoice that’s unsigned by you, incorrect, or outside the agreed amounts — and getting this wrong can delay your builder’s payment. It’s worth checking each invoice carefully before you sign it.

Will someone inspect the build?

• Usually, yes. When you send us a signed builder’s invoice, we’ll arrange a stage inspection. Once we get the inspector’s report, we release the payment for that stage.

Got a question at any point? We’re here to help — just get in touch and we’ll walk you through it.

CONTACT US