Construction Loans

A construction loan is a specific type of mortgage designed for people wanting to build a new home. Depending on the way a construction loan is set up, you may be able to purchase your vacant block of land first and then arrange to build on the land within a specified time frame.

If you are looking to build your new home rather than buy an existing property, you need a different type of home loan known as a construction loan.  Since 1999 we have been helping Australian families to achieve the great Australian dream of building their own homes, by assisting with the choosing of the right construction loan from our panel of lenders.


So whether you are building or making major renovations to your existing home or to an investment property you have bought but which needs a bit, or a lot, of work before you call it home, we are here to help.

Construction loans aren’t set up in quite the same way as a regular mortgage in the beginning. Instead, the lender considers the total amount you need to borrow in order to pay your builder and then breaks down the full amount into separate payments, called progress draws. These are percentages of the total building contract amount paid to the builder throughout the construction process out of your mortgage funds.

While progress draws are being made, the majority of lenders will only expect you to pay the interest due on the amounts that have been drawn. Your full principal and interest payments won’t begin until after the handover has taken place and you have received the keys to your new home or investment property.


Construction loans are suitable for any borrower intending to build a new home on a vacant block of land. This includes buying a house and land package from a licenced builder, or conducting major renovations to an existing home, such as adding new rooms.

You will need to have signed a Building Contract with a licenced builder to be approved for this type of loan.

Property developers for small scale developments may also use construction loans, but only if they’re building no more than four properties on a block of land. For projects where there are more than four new dwellings being built, most lenders will consider this to be larger-scale development, which will require commercial finance instead.

 To find out more call us now on 1300 800 290  or complete the enquiry form.