Construction Finance

There are 2 Types of CONSTRUCTION Loans:


  1. COMMERCIAL  – Development/ Building Finance
  2. RESIDENTIAL – Home Renovation/ Building a New Home From Scratch.


AAA Constructions

We get a lot of enquiries from Builders & Developers asking how much the capitalised interest will cost during the construction period (Say 12 months)….

There are some very complicated formulas to calculate the exact cost of your particular drawdown schedule over a period of time.

In the industry we use the following as a guide:

65% of the yearly interest equates to what you would pay if you drew down 5-7 progressive payments.

For Example a $5 million construction loan over 12 months at 5%pa. = $250,000 per year.

65% of $250,000 is  $162,500. This is the amount you put into your feasibility as your interest cost.

‘AAA’ Commercial Mortgages has helped to finance thousands of projects over the last 30 years.The ideal developer is someone who has experience developing over many years.

  • A good developer does not necessarily have to be a builder, but a good builder is a necessity for a medium to large construction project as the risk in a construction loan is in the build itself being completed on time to high and accurate standard and with minimal variations. For larger construction loans; banks-  and the better non- bank construction lenders will ask for a Tier 1 or 2 builder. If you are a builder how do you mitigate this requirement?
  • Equity is important. Good lenders prefer the developer to own the land outright or have a small debt. That way they can fund the total construction cost.
  • Feasibility is the first thing ‘AAA’ looks at in judging the quality of a project.
  • The feasibility must include a  5-10%p.a.contingency fee of the total construction cost.
  • Today pre-sales are very important.
  • Most of the major banks require at least 100% debt cover.
  • Private lenders – normally require from 0-25% debt cover. (Rates from 7.5%-12.5% p.a.)
  • The off-the-plan purchasers must be arms length from the builder/ developer
  • At ‘AAA’ we can put together the strategies that can mitigate the negatives of a lender’s credit department.
  • Mezzanine and Equity finance is also available for the larger projects.

“The road to success is always under construction”…

Product Information

Loan TypeInterest Only or Interest Capitalising for terms up to 24 months
Loan Amount$250,000- $100 million
Interest ratesVariable Rate (90 Day Bank Bill + Margin) – Call us for a quote!
SecurityEligible commercial & Residential property


Establishment FeesApplication, Valuation, QS and Legal fees may apply
Ongoing FeesProgressive drawing fee may apply



AAA Residential Construction

Renovating or Building a New Home from Scratch?

Our Rate 3.86%pa.

Most banks will charge you a higher rate during the construction period, whereas our bank charges the same amount for construction as it does for a normal home loan.

Product Information

Loan TypeInterest Only 1-5 years.
Loan Amount$150,000- $2.5 million
Interest ratesSAME AS YOUR HOME LOAN – 3.86% pa.

Click on The Get the Ball Rolling Link Below to make a time to chat to us about your specific construction needs.

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