• Whether a first-time buyer or self-employed, a RAMS home loan has flexible options to make the loan work better for you.

  • 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 excluding mortgage insurance premium in metropolitan areas 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. 

      Process and costs explained 

      • You can’t begin construction until RAMS has issued an ‘Authority to Commence Construction’ certificate
      • You must complete building or renovations within 12 months of the authority being issued. If not, the loan will be subject to RAMS Land Policy.
      • 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
      • A progress payment fee of $50 is payable per drawdown (except final drawdown)
      • 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 check lists for construction loans

      RAMS Construction loan - required documents and key points

      RAMS Construction loan - builders licence checklist

      RAMS Construction loan - definitions

    • Hypothetical 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.

      The RAMS solution

      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.

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    1Lender’s Mortgage Insurance capitalization can be included to a maximum of 97% made up of a maximum LVR of 95% plus up to a further 2% solely for lenders mortgage insurance (risk fee) capitalization. 5% deposit and funds to cover transactional costs is also required. Not available on some property types or locations, nature of savings held, and other conditions apply.