Financing Your Prefab, Modular Home

What is Commbank’s new Prefab Home Finance?

The Commonwealth Bank of Australia (CBA) has recently announced significant changes to its lending policies to better support the prefabricated housing sector. These updates aim to make financing more accessible for Australians interested in prefabricated homes, which are known for their faster construction times and minimal site disruption & less unexpected costs, compared to traditional builds.

This is great news if you have been considering an Ironbark Home but were deterred by the limited options for Prefab Finance.

What are the key changes in CBA’s lending policy?

Progress Payments: Traditionally, financing prefabricated homes has been challenging, with customers needing to cover up to 90% of upfront construction costs. Under the new policy, CBA will provide progress payments of up to 60% of the total contract price before the home is installed on-site.

Industry Collaboration: CBA has become the first major bank to join prefabAUS, the peak body for Australia’s off-site construction industry. This partnership aims to tackle challenges in the prefabricated housing sector and promote the adoption of off-site construction methods.

Standardized Contracts: The bank is sponsoring the development of standard construction contracts for modular homes, which will streamline the financing process and provide clarity for both builders and buyers.

These policy changes are set to make prefabricated homes more accessible to a broader range of Australians by reducing the financial barriers associated with upfront construction costs.

With easier access to financing, more homebuyers can consider prefabricated homes as a viable option, potentially leading to an increase in housing supply and more efficient construction timelines.