Managing your construction home loan

If you’re building or renovating, a construction home loan can help you manage payments to your builder by making progress payments at each stage of construction.    

At settlement, we’ll send you a Commencement letter and Construction Pack that includes:

• the approved amount of your loan
• a breakdown of each construction stage and how to request a progress payment
• a list of supporting documents to send with your progress payment requests, and
• answers to frequently asked questions.

See below for additional information on the stages of construction and how progress payments and inspections work.

Your construction loan account is on: 

• a variable interest rate, and 
• interest only repayments until your interest only period expires.

At the end of the interest only period, your repayments will be converted to principal and interest. If you’d like to convert prior to this, please visit Switching to or extending interest only repayments for information on how to request this.

There are typically five stages of construction. Progress payments will generally be made at the completion of each of the following stages of construction:

1. Foundations/slab – approximately 20% of funds required
2. Frame – approximately 20% of funds required
3. Lock-up/external lining – approximately 30% of funds required 
4. Fixing/internal lining – approximately 20% of funds required
5. Practical completion – approximately 10% of funds required. 

Please refer to the Construction Pack for more information.

Progress payments are generally made to the contracted builder by electronic funds transfer (cash or cheque payments not available) at the completion of each stage of construction. 

If you’re required to contribute your own funds, this needs to be paid direct to the builder prior to requesting the first progress payment.

If you’ve already made a payment to the builder, you can request a reimbursement by sending the builder’s invoice and receipt signed as below. This is subject to availability of funds for the construction stage.

We may require a progress inspection to verify the works have been completed in line with the relevant construction stage. 

• If the building contract is below $600,000, a progress inspection is generally required at the first and final stages of the build.
• If the building contract is above $600,000, an inspection is required at every stage of the build. 

If a progress inspection is required, please allow up to 10 business days from the date you emailed us for this to be completed.

1. Sign the builder’s invoice with wet-ink and include the note “I/we authorise payment of this invoice.”
2. Email the invoice and any supporting documents to constructionpayments@macquarie.com. The email subject must contain “Progress payment APP-XXXXXX”. You’ll find your application reference in your settlement email (e.g. APP-123456).

Please refer to the Construction Pack for details of the required supporting documents.

It’s important to provide the correct and full authorisation, and the required supporting documents, to avoid delays. 

Please allow 5 business days from the date we’ve received all information from you for your payment to be reviewed.

We’ll generally send an email if more information is needed, and when payment is finalised.

If you qualify for the First Homeowner Grant, the payment will be released after the slab stage is completed.

To confirm if your First Homeowner Grant application has been submitted, please speak with your broker or banking specialist.

You’ll need to let us know of any changes to the building construction, contract or plans. These changes include, but are not limited to: 

• progress payment schedule
• post-contract variation 
• council-approved plans
• additional work (increase or decrease in amount allocated for the additional work item)
• builder failure or new builder engaged
• change in loan purpose
• any other changes that may happen throughout the process.

All changes will need to be approved by Macquarie. Please email the details to constructionpayments@macquarie.com with any supporting documents noting the APP number in the email subject line.

Depending on the details of the change, a new valuation may be needed which may take up to 10 business days to be finalised. We’ll let you know if this is required.

If you are changing your builder, you’ll need to email the following details and documents to constructionpayments@macquarie.com with your APP number (from your settlement email): 

• new signed building contract
• new progress payment schedule
• stamped and certified council-approved plans current and valid Homeowners’ Warranty Insurance
• current and valid Contract Works Insurance
• current and valid Public Liability Insurance.