Finance your project.
If you're planning a new build or renovation, your financial situation and the size of the project could affect the type of loan you choose.
Renovating or building a home can take time. A construction loan is specifically designed to keep your costs down while the work is being carried out.
How it works.
You can borrow up to 90%
Payments are made in stages
Repaying the loan
Other ways to finance your renovations.
Apply for a home loan
If you already own a home with plenty of equity, you might be able to set up a new home loan specifically for your small to medium project. While the work is being done you might be able to only pay interest on the loan. Then when the work is complete you could change the repayment option to include the principal portion (the portion you borrowed initially).
Use loan buffer or top up
For smaller projects, if you have a Westpac Choices Floating or Choices Floating with Offset Home Loan and are under your loan limit (because you've been paying more than the minimum repayment amount), you can draw the extra money out at any time without having to reapply. If you need more money and meet our lending criteria and responsible lending inquiries, you can ask us for a top up - and if approved - we can usually arrange it on the spot1.
Use a credit card
For small items such as buying materials and appliances - you could use your credit card. You may consider extending the limit or applying for a new credit card just for your project. That means you can pay suppliers, buy materials and get up to 55 days interest free on purchases made with selected Westpac credit cards when you pay off your balance in full (excluding balance transfers) by the payment due date3. However, it is important to understand how interest is charged on credit cards before using it to fund your project.
How much can I borrow?
The amount you can borrow depends on the current or projected value of your home or project and your ability to repay the money depending on your income and the repayments. Here are some general guidelines:
- For simple renovations - up to 80% of your home's value if you're topping up your loan
- For major building work (with fully managed turn-key contracts) - up to 90% of your home's projected value. A low equity margin (LEM) may apply
- For a partial or build only contract - up to 80% of your home's value
- For labour-only contracts - up to 65% of your home's value
- If you're buying and building on a residential section - up to 80% of the land value and up to 90% of the projected completed value when you build on it if you use a fully managed turn-key contract.
Monitoring your project
Depending on the amount you want to borrow, you may need to get valuations at different stages of the project. Cost overruns are common during building work, so it's important to keep track of your budget and make adjustments as the project progresses rather than find out later you can't afford to complete it.
Things you should know.
1 Westpac lending, terms and conditions apply. A documentation fee may apply to a home loan top-up.
2 High LVR loans are only permitted for a new build with a single fixed price contract that specifies a completed, ready to live in property. We may require you to protect against loss of deposit, non-completion and workmanship risks with a satisfactory insurance product. A low equity margin may apply.
3 Interest free days give you access to interest-free credit - if you pay off your balance in full (excluding balance transfers) by the payment due date. Cash advances, balance transfers and interest rates and fees are not purchases and have no interest-free days. To find out more see 'How does credit card interest work'.
4 There are no principal payments required during the build process. With an interest only loan, you’re repaying only the interest amount as it accrues on your outstanding balance, and none of the principal. An interest only loan will cost you more interest in the long term because you're not paying off any of the principal during your interest only period. You must start paying principal and interest on the loan within 12 months of the first drawdown.
Westpac's home loan lending criteria, terms and conditions apply. An establishment fee may apply. A low equity margin may apply.