Building a new home involves more than getting a loan approved. Your lender, building contract, progress-payment schedule and loan structure all need to work together from the first drawdown through to completion.
MortgageDesign helps you understand the lending requirements, compare suitable options and structure the finance around your build, budget and longer-term plans.
A New Build involves more conditions and moving parts than buying an existing home. Understanding your finance early helps you know what you can commit to, with greater confidence.
Your deposit, equity and overall borrowing position
The land and build cost, including what is and is not included in the contract
Your builder, the type of building contract and payment schedule
Lender requirements for valuations, consents and insurance
Any existing mortgage, rent or other commitments during the build
A sensible allowance for variations or unexpected costs
A New Build involves more conditions and moving parts than buying an existing home. Understanding your finance early helps you know what you can commit to, with greater confidence.
Your deposit, equity and overall borrowing position
The land and build cost, including what is and is not included in the contract
Your builder, the type of building contract and payment schedule
Lender requirements for valuations, consents and insurance
Any existing mortgage, rent or other commitments during the build
A sensible allowance for variations or unexpected costs
If you are considering a New Build, speak with MortgageDesign before the finance becomes another moving part to manage. We can review the project, explain suitable lending pathways and help structure the finance from initial approval through to completion.
With a construction loan, funds are commonly released progressively rather than all at once. That means the payment schedule in the building contract needs to align with the lender’s requirements.
Depending on the lender and project, the process may involve:
a Code Compliance Certificate (CCC), or
a Council final inspection report together with the builder’s completion certificate
Construction finance changes as the build progresses. The amount drawn increases over time, and so can the interest cost. Once the home is finished, the loan needs a clear long-term structure.
A lending strategy may consider:
How progressive drawdowns affect interest costs during the build
Whether the construction lending needs to remain floating or flexible during the build
How your loan is set up during construction, and when fixing becomes an option
How existing mortgage repayments or rent affect your cash flow
A financial buffer for cost overruns or timing changes
How the final structure fits future borrowing and property goals
A dedicated adviser guiding you from strategy through to settlement
The objective is to make sure the lending remains manageable during construction and well set-up once the home is finished.
Understand
Review the project, build contract, budget, deposit or equity position and your wider financial commitments.
Identify the lending path
Confirm whether the purchase is a progressive-drawdown construction loan or a turn-key purchase, as the lender requirements and funding process differ.
Structure
Shape the lending around the build or settlement timeline, cash flow and the expected position once the home is complete.
Coordinate
For a construction loan, help manage lender conditions and relevant progressive drawdowns as the build reaches agreed stages.For a turn-key purchase, help manage the finance conditions leading up to completion, CCC and full loan drawdown at settlement
Complete & review
We help guide your lending through to settlement and review your structure annually as rates, goals and circumstances change.
Ideally, Yes! You should understand your financial position and any lender conditions before committing. The exact approval process depends on the contract, project and lender.
Progress payments are staged payments made as agreed parts of the build are completed. For a construction loan, the lender releases funds progressively rather than advancing the full loan at the start.
Usually, not. With progressive construction lending, interest is generally charged on the amount drawn rather than the full approved facility. The exact repayment arrangement depends on the lender and loan structure.
Yes. A turn-key purchase is funded differently from a progress-payment construction loan, but the lender, deposit, contract and approval requirements still need to be assessed before settlement.
Construction lending often needs to remain on a floating or flexible structure while progressive drawdowns are being made. The available structure and timing of any fixed lending depends on the lender and project.
Contract variations and cost overruns should be reviewed before you commit to them. If extra borrowing is required, the lender may reassess the property value, your affordability position and the additional lending request.
