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Flexible Features - Construction

To maintain cash flow for the builder and keep the construction project’s funding on track, we’ve developed the RAMS Construction Option

Progressive interest only payments during construction can help cash flow

Ideal for: People building their own home,and renovators

As a new home takes shape (or major renovations to an existing property progress), various stages of construction mark major milestones. To maintain cash flow for the builder and keep the project’s funding on track, we’ve developed the RAMS Construction Option.

It allows a progress payment to be made directly to the builder as each deliverable is met - slab, roof, lock-up and completion. This way interest is only charged on the funds as they are drawn down.

Please note: RAMS Construction option is not available to owner builders, developers, display or spec homes and refinancing partly completed construction loans.

Key features

  • Maximum LVR for full-doc loan is 95% 1 (or valuation if lower). Lenders Mortgage insurance will apply.
  • Allows refinance of an existing land loan from another loan provider to construct a dwelling
  • Loan repayments are interest only during construction, which may provide potential cash flow benefits
  • RAMS has no set time for construction commencement after land settlement, thus providing a great deal of flexibility
  • 'At Completion' valuation carried out at no cost to you.
    One year fixed rate option available.

Process and costs explained

  • You can’t begin construction until RAMS has issued an ‘Authority to Commence Construction’ certificate
  • Your own funds, if any, must be contributed prior to the first progress payment being made.
  • Note: if a builder requires funds upfront to issue plans, you’ll need to cover that cost from your own funds as well.
  • RAMS will not release any funds until each stage of the construction has been completed
  • The final progress payment will be subject to an ‘At completion’ valuation, Certificate of Occupancy and certificate of currency of a comprehensive building insurance policy.

Documents needed

Before an ‘Authority to Commence Construction’ is issued, you’ll need to provide us with copies or evidence of:

  • Council approved plans and building specifications
  • Fixed price building contract with a licensed builder (signed and dated)
  • Builders risk insurance (or builders public liability insurance);
  • Homeowners’ warranty insurance (if applicable).

Useful checklists and guides for construction loans

RAMS Construction loan - required documents and key points

RAMS Construction - 10 step guide to building your first home

Available on these loans

Full Feature home loan

A home loan with loads of features - offering the ultimate in flexibility, parental leave options and a competitive rate

Fixed Rate Home Loan (Packaged)

RAMS fixed rate home loan has protects you against rate changes during the loan period.

Essential Home Loan

A simple, clear to understand home loan to help you with one of the biggest purchases in life

Construction Scenario

Julie and Tristan lead very busy inner-city lives like a lot of professional couples. Some years ago (while renting in the city) they bought a run-down (but perfectly liveable) house on a good block of land in the north-western metropolitan suburbs as an investment, knowing that planned railway expansion would make it a great family location for city commuters.

Their intention was to knock down and rebuild ‘someday’ when their own ‘family’ plans started taking shape.

Well, that time had come.

While looking at various display homes and talking to builders and architects, Julie and Tristan realised they needed to first consult their home loan provider about finance before they could even think about deciding on the construction process.

They calculated they would need around $250,000 to cover the design and building costs. The original plot had cost around the same amount and they knew the end product would be very attractive, particularly in light of its accessibility to the city given the soon to be completed rail links.

RAMS says .....

Julie and Tristan spoke to a few home loan providers but found RAMS was the most flexible.

The flexible, progress payment feature, as well as the interest-only repayments during construction, meant they could minimise their repayments during the construction period

Knowing how much they could borrow, Julie and Tristan then started to confirm quotes and signed up their builder to manage the project.

So with finance ‘out of the way’, they were able to focus on the fun stuff; the colour scheme, furniture, decorating options, fixtures, appliances and that all-important nursery.