Saves Interest :
It helps you save interest because interest is applicable only on the amount drawdown, not on the maximum amount which bank or lender has agreed to pay. So, you pay less interest rate.
Lower Repayments :
During the construction period, loan repayments are interest only which means that you only need to pay interest only for the amount drawdown until the construction is complete. Therefore, loan repayments are lower.
Opposed to other loans where borrowers can only borrow money against the value of current land or property, construction loan allows borrowers to borrow money against the value of the property as if it were completed.
Payments will not be made to the builder until the builder’s work is inspected and approved by the borrower.