Construction & development finance
Finance for building a home, a duplex or a multi-unit development. Funds are released in stages as the build progresses.
Common uses
Home construction
Build a new home or knock down and rebuild.
Duplex and small developments
Two to four dwellings for investment or sale.
Larger developments
Multi-unit and mixed-use projects.
Land and site acquisition
Finance to secure the site before construction.
How lenders assess a construction loan
A construction loan is assessed on the finished property, the building contract and your ability to manage repayments as the loan draws down.
The building contract
Most lenders want a fixed-price contract with a licensed builder. Cost-plus contracts and owner-builder projects have fewer options.
The "as if complete" valuation
The valuer estimates what the property will be worth when finished, and the loan is based on that value and the total cost.
The builder
Lenders check the builder’s licence and home warranty insurance, and some also review the builder’s track record.
Your contribution
Any gap between the loan and the full cost, including variations, comes from your own funds before the lender pays progress claims.
Serviceability
You are assessed on the full loan amount, even though interest is only charged on what has been drawn.
Timeframes
Lenders set a period for the build to be completed. Delays beyond it may need an extension.
WHO IT SUITS
Four steps, one point of contact
Tell us the plan
What you are trying to do and the approximate amount.
Get a straight answer
Whether it is fundable and which lenders suit it.
Compare the options
Rates, structure, fees and conditions side by side.
Through to settlement
Application prepared, submitted and managed.
Fix these first
These are the issues that most often slow an application down, and what to do about each one.
- Plans not yet approved
Get council or certifier approval for the plans before applying for formal approval.
- Items outside the contract
Get quotes for landscaping, driveways, pools or fencing not in the contract, as lenders count them in the total cost.
- No buffer for variations
Keep funds aside for variations and price increases, which usually need to be paid before the next drawdown.
- Builder insurance not checked
Confirm the builder’s licence and home warranty insurance, for example, the Home Building Compensation Fund in NSW.
- Land and build timing
Plan how land settlement and construction finance fit together, especially if the land is bought first.
How is a construction loan paid out?
Funds are released in progress payments at set build stages, usually after an inspection. You generally pay interest only on what has been drawn. Some loans let you prepay or capitalise the interest, so there are no monthly repayments during the term.
Do I need pre-sales for a development?
Larger projects often need pre-sales. Requirements depend on the lender and project size.
Can I use a private lender for development?
Yes. Private credit funds and non-bank lenders often fund projects that sit outside bank appetite, usually at a higher cost.
Tell us what you need.
No documents needed to start. Call (02) 7822 0255 or 0481 877 727, or answer a few quick questions.