Construction Loan Specialists

A construction loan works differently from a standard home loan. Instead of receiving the full loan amount upfront, funds are released in stages called progress payments or draw-downs. Each draw-down corresponds to a construction milestone, such as laying the foundations, completing the framing, reaching lock-up stage, fit-out, and final completion.

During the construction phase, you typically only pay interest on the amount that has been drawn down, not the full loan. This means your repayments start small and increase as the build progresses. Once construction is complete and the final draw-down is made, the loan converts to a standard home loan with regular principal and interest repayments.

Each draw-down requires a valuation or inspection to confirm the work has been completed to the agreed stage. We manage this entire process, coordinating between your builder, the valuer, and the lender to ensure payments are released promptly and your build stays on schedule.

Many new builds start with purchasing a section and then contracting a builder to construct the home. Financing a land and build package involves two stages: settling the land purchase and then funding the construction. Some buyers already own their land, while others need to purchase it as part of the project.

The loan is typically structured as a single facility that covers both the land purchase and the construction cost. The land portion settles first, giving you ownership of the section. The construction portion is then drawn down in stages as the build progresses. Your total borrowing is assessed against the combined cost of land and build.

We help you navigate the timing of land settlement, council consents, and construction start dates. If there is a gap between purchasing the land and starting the build, we ensure your loan is structured to accommodate this without unnecessary costs. We also work with your builder to align the construction contract with the lender's requirements.

Construction loan applications are more detailed than standard home loan applications. In addition to the usual income, expenses, and deposit assessment, lenders want to see your building contract, plans and specifications, council consent (or evidence it is in progress), a cost breakdown, and details about your builder including their licensing and insurance.

Lenders also assess the end value of the completed home through a valuation based on the plans and specifications. This As-If-Complete valuation determines how much the property will be worth once built, which affects the loan-to-value ratio and the amount you can borrow. Most lenders require the end value to exceed the total cost (land + build), providing a margin of safety.

Your builder's track record matters too. Lenders prefer licensed building practitioners with a solid history of completing builds on time and within budget. We know which lenders are most comfortable with different types of builds and builders, and we present your application in the strongest possible light to secure approval.