- Repay only the minimum amount until construction or renovation is completed.
- During construction, loan repayments are interest only payable on the amount of the loan drawn down.
- The loan is drawn down in stages. One example could include (1) slab down, (2) frame up, (3) external brick work completed, (4) lock up stage and (5) practical completion.
- When construction is completed, repayments are principal and interest unless a further interest only period is selected.

These measures are in place to ensure guidelines are set for the builder. In short, they are there to protect the borrower by ensuring the builder isn't using the funds unnecessarily – i.e. claiming half the construction costs at a stage when only, for example, the slab has been laid.

The amounts to be paid and when are determined by a valuer assessing the land and proposed construction. The lender also monitors the construction process and only makes progress payments when the builder has reached certain objectives and met satisfactory standards. The borrowers provide invoices to the lender who controls payments to the builder.

An option to this type of loan would be a loan that provides construction as an option, as opposed to a construction specific loan.