Construction Loans
Construction loans are complex. We bring Clarity to the process, Comfort in knowing your budget is protected, and Confidence that your dream home will become reality.
We manage progress payments throughout your build so you can focus on your new home.
How Construction Loans Work
Unlike standard home loans, construction loans release funds in stages as building progresses. You only pay interest on the amount drawn, keeping costs lower during construction.
Progress Payments
Funds released as each stage completes. You only pay interest on drawn funds.
Builder Invoices
We process builder invoices and arrange payments at each stage.
Convert to Standard
Once complete, the loan converts to a standard mortgage with P&I repayments.
Typical Progress Payment Stages
Most building contracts follow these standard stages
Deposit
5%
Initial payment when signing the building contract
Base/Slab
10-15%
Foundation and concrete slab completed
Frame
15-20%
Structural framework erected
Lock-up
20-25%
External walls, roof, windows, and doors installed
Fixing
20%
Internal fittings, plumbing, electrical completed
Completion
5-10%
Final payment upon handover
* Percentages vary by builder and contract. These are typical ranges.
Construction Loan Options
Land & Construction Package
Buying land and building? We structure separate loans for land purchase and construction with a single application.
- Separate land and construction facilities
- Interest-only during build
- Fixed price contract required
- Progress draw facility
Construction Only
Already own land? Finance your build with progressive drawdowns as construction milestones are completed.
- Progress payments
- Build on owned land
- Knockdown rebuild options
- Owner-builder options (limited)
Renovation Loans
Major renovation? Access funds to transform your existing property with progress payments during renovation.
- Staged payments
- Increase property value
- Structural changes
- Extensions & additions
What You'll Need
Building Documents
- Fixed price building contract
- Builder's insurance certificates
- Approved plans and permits
- Specifications and inclusions
Timeline Considerations
- Pre-approval before signing contract
- Typical build: 6-12 months
- Rate lock considerations
- Existing home sale timing (if applicable)
Construction Loan FAQs
What deposit do I need for a construction loan?
Most lenders require 10-20% of the total project cost (land + build). This can come from savings, equity in another property, or parental guarantee.
Can I use the First Home Owner Grant for building?
Yes! The FHOG ($10,000 in Victoria) applies to new builds where the total value is under $750,000. Building a new home is one of the best ways to access this grant.
Do I pay interest during construction?
Yes, but only on funds drawn. As each progress payment is made, your interest charges increase. Full P&I repayments begin after construction completes.
Can I be an owner-builder?
Some lenders offer owner-builder construction loans, but they're more restrictive. You'll typically need more experience and a larger deposit. We can advise on options.
Planning to Build?
Book a consultation to discuss your construction loan options and get pre-approved before signing with a builder.
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