Construction loan guidance for building with confidence
Construction lending works differently from a standard home loan. We help you understand staged drawdowns, builder documents, valuations and lender requirements before the build starts.
How Construction Loans Work
Stage-by-Stage Drawdown
Construction loans release funds in stages as your build progresses — from deposit and foundation, through frame and lock-up, to final completion. You only pay interest on what's been drawn down.
Interest-Only Options
During the construction phase, many lenders offer interest-only repayments on the funds drawn so far. Once construction is complete, the loan typically converts to standard principal and interest repayments.
Land + Build Packages
If you haven't purchased land yet, some lenders offer combined land and build loans — one application and one loan to manage. We help you compare whether this structure suits your project.
Fixed vs Variable Rates
Some lenders offer fixed rates during construction, while others prefer variable. We help you understand the pros and cons of each approach for your situation.
Build Cover
A contingency buffer may be required or recommended depending on the lender and project. We help you understand how cost overruns can affect approval and cash flow.
Common questions about construction loans
Funds are usually released in stages as building work is completed, rather than paid in one amount at settlement.
Lenders commonly ask for a fixed-price building contract, council-approved plans, builder details, insurance evidence and valuation information.
Usually you pay interest on the amount drawn down so far. Repayment type and timing depend on the lender and product.
Structural renovations may be funded through construction-style lending, while smaller projects are sometimes funded through equity release or redraw. The right approach depends on the project scale and lender policy.
Cost overruns are generally not covered by the original approval, so lenders may ask for evidence that you can fund variations yourself. Building a contingency buffer into your budget from the start can reduce the risk.
Ready to plan your construction finance?
We help you prepare the loan structure, documents and staged drawdown expectations.