Progress payments for construction loan

Progress payments are made at each stage of construction. A construction loan generally has five stages, although it can have up to eight. We may consider a change in the number of payments on a case-by-case basis and subject to credit approval.  

For more information, refer to the Macquarie Residential Home Loan Credit Guidelines. 
 

Example of standard schedule

To ensure payments are made to the builder in a timely manner, it’s important to provide the correct documentation to our team. All documents need to be emailed to constructionpayments@macquarie.com with the APP number noted in the email subject line.

If we need more information to process the request, you’ll receive an email with the details of the outstanding documents required.

To process the first progress payment claim, we'll need:

• A builder’s tax invoice that has been signed and authorised by the client - the tax invoice must: 
  • Be on the builder’s letterhead with builder’s account details noted for electronic transfer payment 
  • Include a note from the client stating "I authorise payment of this invoice" 
  • Include a dated signature of the client.

• Fully executed building contract, signed and dated by both the client and the builder.

• Homeowner’s warranty insurance, also known as indemnity insurance, provided by the builder, listing the following details: 
  • At least one mortgagor’s full name 
  • Builder’s full name 
  • Site address 
  • A cover amount greater than or equal to the amount on the building contract.

• Contract works insurance provided by the builder, listing the following details: 
  • Builder’s full name 
  • A cover amount greater than or equal to the amount on the building contract 
  • Where the insurance is a specific property cover, the site address 
  • Where the insurance is a blanket/annual policy, the state where dwelling is being built.

• Public liability insurance provided by the builder listing the following details: 
  • Builder’s full name 
  • A minimum cover amount greater than or equal to $2 million 
  • Where the insurance is a specific property cover, the site address 
  • Where the insurance is a blanket/annual policy, the state where dwelling is being built.

• Stamped and certified council-approved plans - this is required by the valuer at slab stage to proceed with the progress inspection. 

Note, all insurance must be current and valid prior to the first payment being made.

For subsequent progress payment claims, we’ll need:

• A builder’s tax invoice that has been signed and authorised by the client. The tax invoice must: 
  • Be on the builder’s letterhead with builder’s account details noted for electronic transfer payment. 
  • Include a note from the client stating "I authorise payment of this invoice" 
  • Include a dated signature of the client.   

For the final drawdown claim, we’ll need:

• A builder’s tax invoice that has been signed and authorised by the client – the tax invoice must: 
  • Be on the builder’s letterhead with builder’s account details noted for electronic transfer payment 
  • Include a note from the client stating "I authorise payment of this invoice" 
  • Include a dated signature of the client.

• A copy of the property building insurance policy in at least one of the mortgagors’ names noting the mortgagor(s) as the insured party and Macquarie Bank noted as the interested party. 

No occupancy certificate is required. 

We’ll need the builder’s bank details to be on their tax invoice so we can make payment directly via electronic transfer. We do not issue bank cheques. 

We can reimburse your client only when it’s for a release of deposit and if they’ve made the payment to the builder first.  

The reimbursement claim must be for funds included in the approved payment schedule. To process a reimbursement claim, we'll require the following documents to be emailed to constructionpayments@macquarie.com with the APP number noted in the email subject line:  

• Builder’s tax invoice – the tax invoice must be on the builder’s letterhead 
• Receipt on builder’s letterhead confirming the payment has been received that includes: 
  • a note from the client stating "I authorise payment of this invoice" 
  • dated signature of the client .

Any reimbursements or surplus funds remaining after construction will be deposited into the client’s construction account and will be available to them as redraw.

Progress inspections will generally be carried out at each stage of the build where the building contract price is over $600,000.  

For builds under $600,000, progress inspections will generally be carried out at base/slab and final/completion stages.