How does a construction loan differ from a home loan?

Unlike home loans, which you typically receive the whole loan amount at settlement, construction loans allow funds to be drawn in stages, as you receive progress payment requests from your builder. 

Typically, a construction option offers Ijara-only repayments during construction period. This means that you’ll only make Ijara repayments on funds that have been drawn down at that point in the process – not the whole loan amount up front.

These will then revert to a standard principal and Ijara loan once your home has been fully built.