CONSTRUCTION LOANS

Finance your build with the loan matched to each stage

Construction finance works differently from a standard home loan. We help you understand the lender process, project costs and progress payments before building begins.

Talk through your construction loan

BEFORE THE FIRST DRAWDOWN

Make sure the contract, budget and finance line up

Construction lending depends on more than borrowing capacity. The plans, building contract, valuation, contribution and progress-payment schedule all need to work together.

Prepare the project documents

Lenders commonly require approved plans, specifications, builder details and a signed building contract before the construction facility can proceed.

Understand progress payments

Funds are generally released as agreed stages are completed. Builder invoices and, in some cases, lender inspections are part of the drawdown process.

Allow for costs outside the contract

Variations, site costs, finishing work and delays can affect the final budget. A useful finance plan leaves room for costs the base contract may not cover.

FROM APPROVAL TO COMPLETION

Keep the finance aligned with the way the build will actually happen

The lender generally assesses the proposed completed property using the plans, specifications, contract and expected end value. That valuation can affect the approved loan and the contribution required.

During construction, funds are usually drawn progressively rather than released in one amount. Interest is generally charged on the amount drawn at each stage, subject to the loan terms.

At completion, the lender's final requirements are met and the facility generally moves into its ongoing home-loan repayment structure.

Prepare for the build

Construction Finance Needs to Follow the Project Stage by Stage

The lender generally releases funds as agreed building stages are completed. We help you understand the documents, valuation, contribution and progress-payment process so the finance is ready to move with the build.

Construction project planning for a new home

Valuation and contribution

The completed-property valuation helps determine the lender's position. If it is lower than expected, additional funds or a change to the project may be required.

Builder and contract requirements

Acceptable builders, contract types, insurance and documentation vary by lender. Checking these requirements early can reduce avoidable delays later.

Variations and delays

Building projects change. A sensible plan considers variations, timing changes and other costs before they become a funding problem midway through construction.

Professional guidance, clearly accountable

Raise Wealth Pty Ltd trading as The Digital Brokerage is a Credit Representative (553369) operating under Australian Credit Licence 389328.

FREQUENTLY ASKED

Common questions about this loan type

Clear answers to the questions clients often ask before applying.

How are construction loan funds paid?

Construction loan funds are generally released in stages as the build reaches agreed milestones. Builder invoices are usually required and the lender may arrange inspections before releasing funds.

Do I pay interest on the full construction loan from day one?

Generally, interest is charged on the amount drawn rather than the full approved facility during construction. The exact repayment arrangement depends on the lender and loan terms.

What documents are usually needed for a construction loan?

Lenders commonly ask for approved plans, specifications, builder details, a signed building contract and evidence of relevant insurance or approvals.

What happens if the build costs more than expected?

Variations or unexpected costs may require extra funds from you and can affect the loan. It is worth allowing a buffer and understanding how the lender treats changes before construction starts.

Can construction finance be used for renovations?

It can be appropriate for substantial structural renovations where funds need to be released in stages. Smaller projects may suit a different finance structure, depending on the circumstances.

We can help you choose

We can help you find a loan that fits your plans

Tell us what you’re planning. We can explain your options, compare relevant lenders and help you work out your next step.

Talk with us about your loan

Our process

How to get a home loan online

Start with discovering your borrowing capacity by using our free calculator, then we can help you compare suitable lenders, organise the application online and manage the steps through approval and settlement.

Check your borrowing power

Estimate what you may be able to borrow and talk through your income, expenses, deposit and lending goals with a mortgage broker.

Start here →

Compare and apply online

We compare suitable loan options, then help you provide the information and documents needed to submit your application online.

Application underway

Approval to settlement

We coordinate lender questions, requirements and key milestones, helping keep the application moving from approval through to settlement.

On to settlement ✓

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Loan features

Understand the Features That Shape Your Home Loan

Offset accounts, redraw, repayment options and rate structures can change how your loan works. Explore the key features and understand what they mean for you.

Explore all loan features →