I'm Looking for a Bank for Land and Construction Loan

NZ OZ Sam on 07/04/2021 - 22:37
Last edited 08/04/2021 - 09:48 by 1 other user

Hi,

I am exploring options currently for a lender that offers land + construction loan at a sharp rate. I can do 70% LVR to get a better deal but prefer to do 80% if the pricing is same or only slightly better.

I have looked at some of the online-only banks with great variable rates however none of them offer construction loan.

What I am after:
- Low or no application Fee
- Low or no progress payment/valuation fee
- Ideally no package fee unless it's one of the major banks that offers a decent rewards credit card
- If the bank has some sort of cashback offer, absolutely fabulous!
- Offset is good if the bank offers but not a requirement

I have found RAMS so far who offer $2k cashback with 2.64%(80% LVR) or 2.59%(70%) LVR however they charge $220 valuation fee and $50 for each progress payment
Adventage offering 2.48% with no ongoing fee but no other benefit - Broker recommended this as the best option however I understand that most brokers have a panel of 20-40 lenders so there might be better options out there that they don't have access to

Post construction, I would most likely stay on variable hence on lookout for a sharp variable rate. From past experience, I know that most banks require the customer to make a phone call to convert the loan to fixed and charge a variation fee along with submitting an application rather than making it easy as clicking a button on internet banking to fix the loan.

Any recommendations/tips would be much appreciated. I scrolled through atleast 40 different posts before creating this topic but couldn't find the answer I was after.

Financial

Comments

  • boomramada on 07/04/2021 - 22:43
    +2

    Mortgage broker ?

    • NZ OZ Sam on 07/04/2021 - 22:44

      Tried already - "Adventage offering 2.48% with no ongoing fee but no other benefit - Broker recommended this as the best option however I understand that most brokers have a panel of 20-40 lenders so there might be better options out there that they don't have access to"

      • boomramada on 07/04/2021 - 22:49
        +1

        There is no silver bullet, try a different broker ?

        • NZ OZ Sam on 07/04/2021 - 22:53

          Certainly however still no broker will have access to all banks. Just some examples: 86400, loans.com.au, ubank, bank australia and some other online banks that brokers don't have access to which I thought might be suitable for construction however it's not possible to hunt for and contact each bank hence asking here.

          • sweefu on 08/04/2021 - 09:35
            +1

            @NZ OZ Sam: Just FYI 86400 and Bank Australia both deal with brokers

  • avoidfullprice on 07/04/2021 - 23:04
    +1

    I suppose if you don't think mortgage brokers have access to all deals, you just have to crunch your numbers and call each bank up to ask about that progress payment fees. Any of past and present deals close to what you want that is/was better than RAMS and Advantage?

    https://www.ozbargain.com.au/tag/home-loan

    • NZ OZ Sam on 07/04/2021 - 23:09

      Thanks. Yes, checked that category already however most variable loans mentioned there with sharp variable interest rate don't apply to construction loans.

    • NZ OZ Sam on 07/04/2021 - 23:12

      Thanks. Yes, checked that category already however most variable loans mentioned there with sharp variable interest rate don't apply to construction loans.

  • barseeker on 08/04/2021 - 00:48
    +1

    yes the same problem not many banks do construction loans and investment loans. so had to go with suncorp $375 annual fee package with offset credit card but fee is waived first year and loan fees. fixed is about 2.25 and variable 2.9%

  • deeznuts1234 on 08/04/2021 - 02:22
    +2

    Currently have a land loan and about to start a construction loan with CBA - 2.69% variable with all fees waived (no wealth package) so redraw facility only. No cashback, 80% LVR. Figured I would just cop the slightly higher interest rate for the building period to avoid any headaches as I've always banked with CBA and have always been treated well. Looking into refinancing after the build is complete and valuation is more straightforward.

    • Seraphin7 on 08/04/2021 - 09:06
      +2

      This is the way to go.

      Get on board with a lender that you trust and that will provide as straightforward a process as is possible during the construction phase. This is where you really don't want headaches. If it ends up costing a bit more of this period, it may well pay for itself during that period.

      Refinance once everything's complete to get a sharper rate and overall deal. Many more lenders will come to the party on a finished package than a construction arrangement.

    • boomramada on 08/04/2021 - 17:23

      I had the opposite experience, start with CBA, initial stage, CBA valuver could understand the plan and reject my approval. Delayed the purchase, had to pay interest/panelty on land purchase (about $5k). Then went with ANZ. Complaint to CBA and they agreed to pay me the cost of interest/panelty. Issue was the third party valuver contracted by CBA.
      Although eventually I switch it to CBA as they offer me a better rate than ANZ. 🤷

  • dasher86 on 08/04/2021 - 07:12
    -3

    Welcome to Ozbargain Australia's number one site for mortgage broking, we have access to all lenders on our panel not just 20-40.
    Please take a number and wait as we are experiencing high enquiry volumes about insurance claims also.

    dasher86 on 08/04/2021 - 07:12 (Collapsed - Offtopic. Show)
  • pyramid on 08/04/2021 - 07:18
    -1

    We also specialise in get you out of any red light camera fines..

    pyramid on 08/04/2021 - 07:18 (Collapsed - Offtopic. Show)
  • SBOB on 08/04/2021 - 08:58

    Any recommendations/tips would be much appreciated

    finance with cheapest land/construction loan for build stage
    Post build, research and refinance with low cost lender that doesnt offer construction loans

    Construction loans require more paperwork/lender involvement due to payment stages (and slightly higher risks).

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