• Currently favoured by the banks (via low deposit requirements) due to the current lack of housing in New Zealand
• Typically come with conditional approvals ranging from 12 months, giving you time to plan for your home
• Interest only payments can help make your outgoings more manageable during the construction of your home

Types of Construction Loans

Construction loans typically come in two types of contracts:

1. Turn Key Contract

A turn key contract comes with a fixed price that is dictated by the builder of the property. These may also be sold as a package, which includes both the house as well as the land it is occupying (also known as a Land and Build Contract).

Turn key properties are often chosen by buyers due to its simplicity. These are designed to be ready for occupancy the moment you “turn the key” to your new home. Properties purchased via a turn key contract may also come with additional features, such as:

• Major landscaping
• Drives and pathways
• Decoration (paintings, floor coverings)

Loans for turn key contracts come with relatively low deposit requirements: 10% for first home buyers and 20% for investment properties.

One thing to keep in mind are the progress payments that are involved. These are funds that go to the builder at various stages of the construction process. - similar to a “pay as a go approach”.