Your borrowing capacity depends on your income, expenses, existing debts, deposit or equity, land value, construction costs and the lender’s criteria.

Most construction loans operate on an interest-only basis during construction, with interest calculated on the funds that have already been drawn. The exact structure varies between lenders.

Potentially. If you already own your land or have significant equity in it, some lenders may allow that equity to form part or all of your required contribution.

Progress payments are staged payments made to your builder as different parts of the construction are completed.

The lender progressively releases funds throughout the build rather than advancing the entire loan upfront.

Often, yes. Lenders may require inspections or valuations at certain stages before releasing further funds.

Yes. Construction loans can potentially be used for significant structural renovations and extensions.

Smaller cosmetic renovations may be better suited to other finance options.

Potentially. There are loan structures available for borrowers purchasing land and then building a home on it.

We can help structure the finance around both the land purchase and construction.

Once the build is complete and the final progress payment has been made, your construction loan will generally transition to a standard home loan repayment structure.

You’ll generally need to cover costs above the lender’s approved construction amount unless additional finance is approved.

Having a realistic budget and contingency available before construction starts can help.