Construction Loans › When does a construction loan become a normal home loan?

When does a construction loan become a normal home loan?

Once the final stage is drawn, the home passes its completion checks, and any final valuation is done, the construction loan automatically converts to a standard principal and interest home loan.

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

Why this matters

The construction loan is only temporary. When the build is finished and verified, it rolls over into a normal mortgage, and you begin repaying principal and interest like any home loan. At that point it is worth reviewing your rate and structure, since the loan you end up with is a standard one you can refinance later.

The key points

Conversion happens once the build is complete and verified.
It becomes a standard principal and interest loan.
Repayments switch to principal and interest.
Worth reviewing your rate at this point.

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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.