Construction Home Loans
A construction home loan is a specialized type of finance designed for people building a new home or undertaking major structural renovations. Unlike a standard home loan where the full amount is paid out at settlement, a construction loan uses 'progressive drawdowns.' This means the lender releases funds in stages as the build reaches specific milestones, such as the slab, frame, and lock-up. During the construction phase, you typically only pay interest on the amount that has been drawn down, which helps manage costs while you may still be paying rent elsewhere. Lenders require a fixed-price building contract from a licensed builder and will perform a 'subject to completion' valuation before final approval. The main trade-off is the increased administrative work and stricter documentation requirements compared to buying an established home. We help by finding lenders with efficient drawdown processes and competitive interest rates for the life of the loan.
When it makes sense
- Building a new family home on a vacant block of land.
- Purchasing and constructing a house and land package.
- Undertaking major structural renovations to an existing property.
- Building an additional dwelling or 'granny flat' on your land.
- Managing finance for a multi-unit residential development.
- Refinancing an existing land loan to include a construction facility.
- Comparing lenders that offer owner-builder finance options.
Indicative terms
| Indicative loan size | 00,000 to ,000,000+ |
| Indicative max LVR | Up to 95% (based on completed value) |
| Indicative rate range | 6.05% p.a. – 7.30% p.a. |
| Loan term | Up to 30 years |
| Drawdown stages | Usually 5 to 6 standard stages |
| Repayment types | Interest Only during build, then P&I |
| Required documents | Fixed-price contract, plans, builder's insurance |
| Indicative fees | Progress inspection and valuation fees |
How it works
- Land & Build Assessment — We review your land purchase and proposed building contract to ensure they meet lender requirements and calculate your total project budget.
- Lender Shortlist — Our team shortlists lenders who have experience with construction, focusing on those with fast progress payment turnaround times.
- Valuation & Approval — The lender conducts an 'as if complete' valuation to confirm the property's future value, which forms the basis for your final loan approval.
- Progress Payments — As each stage of the build is finished, the builder submits an invoice, and we help coordinate the lender's inspection and release of funds.