HomeStart rolls out fixed rate construction loan
The South Africa-based lender has launched its first fixed-rate construction loan to help more borrowers manage costs when building their homes.
HomeStart, a non-bank lender backed by the South Australian government, has launched a construction loan at a fixed rate of 2.89% over three years (4.10%, comparison).
The lender noted that although housing construction in South Australia has been “booming”, it has meant higher costs and longer construction times for many new home buyers entering the market.
As such, he launched the new product to help “relieve some of the financial burden” on South Australian borrowers who are building their own homes.
The loan allows customers to set their interest rate at the start of the construction period, rather than at the end, and allows buyers to gradually draw down their approved loan to make payments to their builder as they go. that the key stages of their house have been completed.
HomeStart said it will also offer customers the option of no refunds for the first nine months of construction, or until construction is complete (whichever comes first), so they “don’t don’t need to cover loan payments and rent or other payments on their current home.
Speaking of the new fixed rate construction loan, Outgoing CEO of HomeStart John Oliver said: “Fixed rates are attractive to many homebuyers because they help them better plan and budget for their new home.
“The fixed-rate construction loan is offered through our HomeStart home loan and graduate loan with a deposit as low as 3%, and no lender’s mortgage insurance is required.”
Mr Oliver announced earlier this week that he would be stepping down at the end of this year, after 12 years at the helm, and quitting ‘full-time corporate life’.
[Related: Housing construction approvals continue to decline: ABS]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian brokerage industry, the mortgage market, financial regulation, fintech and the wider lending landscape, Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser webcasts. Live.