Construction Loans › Can I get an interest only period during construction?

Can I get an interest only period during construction?

Yes. Construction loans are typically interest only during the building phase, usually for a limited period such as up to a year or two, then they convert to principal and interest once the home is complete.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

The interest only build phase keeps repayments manageable while the home is going up. There is normally a time limit on how long the build phase can run, so delays matter. Once the build finishes, the loan switches to principal and interest, and your repayments step up, which is the point to plan for.

The key points

Construction loans are usually interest only while building.
There is a limit on how long the build phase can run.
It converts to principal and interest at completion.
Repayments rise once the build is done.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.