Building, financed in step with the build.
A home to live in or an investment property, on land you own or are buying, a construction loan works differently from buying an established home. We line up the loan, the valuation and your building contract before you sign, then stay in it through every progress payment to handover.
How a construction loan actually works
Instead of one lump sum, the lender releases the money in progress payments as each stage of the build is finished, usually the slab, frame, lock-up, fixing and completion. Most lenders charge interest only on what has been drawn so far, so repayments start small and grow with the house.
Before any of that, the lender values the home as if it were already built, using your plans and building contract. That valuation, not just the price you are paying, sets how much they will lend, which is why we look at it early.
Builders, contracts and the details lenders care about
Lenders differ more on construction than almost anywhere else. Some are comfortable with a fixed-price contract from a registered builder and little else; others have firm rules about variations, cost increases, owner builders, or the time between settling on the land and starting work.
We compare those rules across a panel of more than fifty lenders and match you to one whose process suits the build you have planned, not just the one with the sharpest rate.
- Start withYour plans and building contract
- We stay throughEvery progress payment to handover
- Matters mostHow the lender values the finished home
Questions about this specifically.
Do I make full repayments while the house is being built?
Usually not. Most construction loans are interest only on the amount drawn so far, so repayments rise as each progress payment is released, then move to normal repayments once the build is finished. The exact terms depend on the lender, and we go through them with you before you commit.
What if the build ends up costing more than the contract?
Lenders generally expect variations and cost increases to be paid from your own funds before they release further payments, and some want to see a buffer up front. How each lender handles this is worth knowing before you sign with a builder, so we raise it early.
Can the land and the build be in one loan?
Often, yes. Many lenders can fund the land and the construction together, with the land settled first and the build drawn in stages afterwards. Whether that suits you depends on your timing and the lender, which we work through with you.
Looking for something else?
Find out what you are actually eligible for.
A first conversation costs nothing and commits you to nothing. Worst case, you learn your current loan is fine.