How does a construction loan work in Australia?

A construction loan generally releases funds in stages as the build progresses rather than paying the full amount upfront. The lender assesses the land, plans, building contract, budget and borrower before approval. The borrower usually contributes required funds first and must meet conditions before each progress payment.

What are progress payments in a construction loan?

Progress payments are staged payments to the builder after agreed construction milestones, such as slab, frame, lock-up and completion. The lender may require invoices, inspections or valuations before releasing each payment. The stages must align with the building contract and lender requirements.

Do I need a fixed-price building contract for a construction loan?

Many lenders prefer or require a signed fixed-price contract because it helps define the total build cost and progress schedule. Variations, exclusions and cost overruns can still occur, so maintain a contingency buffer and confirm how changes will be funded before construction begins.

How is interest charged while a home is being built?

During construction, interest is commonly calculated on the amount already drawn rather than the full approved limit. The loan may require interest-only payments during the build before converting to principal and interest. Exact repayment arrangements vary by lender and loan structure.

CONSTRUCTION LOANS

From plans to progress. A clearer path.

Plan your building budget, construction stages and finance options with clearer guidance in English or 中文.

Book a Free Consultation

Build the plan before the first stage.

Start with your project, budget and timeline.

Whether you are building a new home or planning a major renovation, we help you review the finance structure, contract and progress payments before you move ahead.

Home construction planning and project details

Your building project

Start with the land, plans and building scope. Review your contract, expected timing and what is included before discussing construction finance.

Your finance structure

Review your deposit, land finance and overall borrowing needs together. We help you compare suitable options against your income, commitments and lender requirements.

Your stage payments

Construction funds are generally released in stages as work progresses. Review the contract payment schedule, invoices and lender checks before each payment is requested.

A building budget goes beyond the contract.

Plan for the whole project.

Review the building contract alongside land costs, fees, living expenses and a contingency before setting your budget.

Coins and documents representing buying and loan costs

Contract and inclusions

Check what the building price includes.

Review the fixed-price contract, site works, allowances and exclusions so your finance conversation starts with a realistic scope.

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Costs beyond the build

Allow for more than the contract price.

Consider land and government charges, professional fees, moving costs and living expenses while the home is being built.

Savings and a home representing a deposit

A buffer for changes

Keep room for the unexpected.

Discuss a contingency for variations and delays, and check with your lender before committing to changes that affect the cost or scope.

House keys, a calculator and financial documents on a desk

A CLEARER BUILDING BUDGET

Contract + costs + cash buffer

Read the inclusions

Check allowances, site works and exclusions against your plans.

Plan your cash flow

Include living costs during the build and funds for changes.

Review before you commit

Discuss contract variations and finance requirements with your broker and lender.

From building plans to the next stage.

Start with a clear plan.

We help you review the project, compare finance options and prepare the application.

Guidance in English & 中文.

Person, messages and documents representing an initial conversation

① Start a conversation

Tell us about the home you plan to build, your land, timeframe and budget. Bring the plans or quotes you already have so we can frame the first conversation.

Loan documents and a magnifying glass representing a financial review

② Review your position

Review your income, commitments, deposit and land position alongside the building contract. Identify costs outside the contract and the cash buffer you may need.

Charts and arrows representing comparison of loan options

③ Compare your options

Compare suitable construction finance options, fees and repayment arrangements. Review how each lender handles progress payments and the documents needed at each stage.

House, key and checklist representing settlement preparation

④ Plan the next stage

Prepare the requested documents for lender assessment. If approved, understand the payment schedule, inspection requirements and how to request funds as building progresses.

Bring your building plans. We’ll guide the next step.

Loan application documents and planning materials

At your first conversation

A simple project overview is enough.

✓ Your project: land, plans and building scope.

✓ Goals & timeframe: what you hope to build and when.

✓ Your budget: deposit, income, expenses and debts.

Later, for your application

Requirements vary by lender and project. We will explain what to prepare.

Your lender may ask for:

• Identification and income evidence

• Building contract and payment schedule

• Plans, approvals and land details

• Account statements and other commitments

Start with what you have.

Discuss the plan before every document is ready. Use the agreed secure process to share financial documents.

Keep exploring, at your pace.

Explore borrowing power, building finance questions and preparation tools at your own pace. Estimates are a starting point; your project and lender assessment determine the options available.