RatesniffersRATESNIFFERS
LoginSign up

Construction Loan Rates, July 2026

Home loans for building rather than buying, across Australian lenders, sorted by comparison rate. Construction loans draw down in stages as the build progresses, with interest only on what's drawn. Refreshed daily.

RBA cash rate 4.35%(effective 17 Jun 2026)|Rates updated |929 products|85+ Australian lenders
Advertisement
Editor's Pick · Ratesniffers Editorial Team

Top Home Loan Rates in July 2026

Reviewed by the Ratesniffers Editorial Team, July 2026

The sharpest construction home loan rates for building a new home. These suit buyers with a fixed-price building contract who need staged drawdowns and interest-only repayments through the build. Refreshed daily, no commercial filtering.

Type
Lender & product
Rate p.a.
Comp. rate p.a.*
Max LVR
Variable rate
RACQ BankMortgage Breaker (Construction)
5.84%
5.88%
60%
Fixed rate
gmcuFixed Rate 18 months - Special construction offer
6.39%
6.71%
95%
*Important Information and Comparison Rate Warning

This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is based on a loan of $150,000 over a term of 25 years.

The information provided on this site is general in nature and does not take into account your objectives, financial situation or needs. Before acting on any information, consider whether it is appropriate for you and read the relevant Credit Guide and lender disclosures.

What is a construction home loan?

A construction loan funds a home you are building rather than buying finished. The lender releases money in stages (progressive drawdowns) as each milestone is completed, slab, frame, lockup, fit-out and completion, and you pay interest only on the amount drawn so far during the build. As of 8 July 2026, the lowest construction loan rate Ratesniffers tracks is 5.84% p.a. Once the house is finished, the loan converts to a standard principal-and-interest home loan.

How do construction loan repayments work?

During the build you pay interest only on the funds drawn to date, so repayments start small and rise with each drawdown, which keeps holding costs manageable while you may still be paying rent. When construction finishes, the loan rolls into a normal principal-and-interest loan for the full balance and repayments step up. Estimate the post-construction repayment with the repayment calculator.

Which lenders offer construction loans?

As of 8 July 2026, Ratesniffers is tracking construction home loans from 28 Australian lenders. Not every lender offers build finance, and their valuation and progress-payment processes differ, so lender fit matters as much as the rate. The table above shows current construction rates ranked by comparison rate.

Are construction loan rates higher?

Not necessarily. The lowest construction rate Ratesniffers tracks is 5.84% p.a., against 5.89% for the cheapest standard loan. The bigger differences are the fees, the valuation done on completion, and the drawdown administration, not a large rate premium. Compare against the cheapest standard rates so you know the gap.

Construction loan questions, answered

What is a construction home loan?

A construction loan funds a home you are building rather than buying finished. Instead of one lump sum at settlement, the lender releases the money in stages (called progressive drawdowns) as each build milestone is completed: slab, frame, lockup, fit-out and completion. You usually pay interest only on the amount drawn so far during the build, then the loan converts to a standard principal-and-interest home loan once the house is finished.

How do construction loan repayments work?

During the build you pay interest only on the funds drawn to date, so your repayments start small and rise with each drawdown. That keeps holding costs down while you may also be paying rent. When construction finishes, the loan rolls into a normal principal-and-interest loan for the full balance, and repayments step up accordingly. Interest-only-during-construction is standard, not an upgrade.

Which lenders offer construction loans?

As of 8 July 2026, Ratesniffers is tracking construction home loans from 28 Australian lenders. The live table above shows current construction rates ranked by comparison rate. Not every lender offers construction finance, and their valuation and progress-payment processes differ, so the lender fit matters as much as the rate.

Are construction loan rates higher than normal home loans?

Not necessarily. The lowest construction rate Ratesniffers tracks is 5.84% p.a., against 5.89% for the cheapest standard loan, so they are broadly comparable. The bigger differences with construction finance are the fees, the valuation done "on completion", and the drawdown administration, not usually a big rate premium.

How much deposit do I need for a construction loan?

Similar to a standard purchase, typically 20% of the total land-plus-build cost to avoid Lenders Mortgage Insurance, though many lenders accept less with LMI. Lenders assess the 'on completion' value from your fixed-price building contract and plans, and lend against that, so a fixed-price contract from a licensed builder makes approval smoother.

Next: work out your borrowing capacity with the borrowing power calculator, compare all home loan rates, or check first home buyer options if you are building your first home.