The Challenge

Tom and Olivia had found the perfect block of land and a builder they trusted, and they were excited to build their first family home rather than buy an established one. What they were less sure about was how to actually finance it.

Building a home is not funded like a normal purchase. They needed money for the land, and then further funds released in stages as the build progressed. On top of that, they were worried about paying a full mortgage on the entire amount while they were still renting and the house was only half built.

They wanted a loan that matched the way a build actually works, and that kept their repayments manageable until they could move in.

Finding the Right Solution

After understanding their plans, their builder’s fixed-price contract and their budget, our broker explained how a construction loan is designed for exactly this situation.

Instead of paying out the full loan at once, a construction loan releases funds through progressive drawdowns that match the stages of the build, such as the slab, frame, lock-up, fit-out and completion. The lender pays each stage as it is finished and invoiced, which means Tom and Olivia would only pay interest on the money actually drawn at each point, not the full approved amount.

We also set the loan to interest-only during construction, keeping repayments low while they were still paying rent. We compared lenders to find one with a competitive construction rate and a smooth drawdown process, and we built in a sensible buffer in case of any cost variations during the build.

The Application Process

We helped the couple pull together everything the lender needed, including the fixed-price building contract, the council-approved plans and the builder’s insurances, alongside their income and identification documents.

Because construction lending is assessed on the on-completion value of the home, we presented the plans and contract clearly so the lender could value the finished property with confidence.

With the documentation complete, the lender approved the construction loan, ready to release funds stage by stage as the build moved forward.