Construction Home Loans Build With Confidence
Building a new home works differently from buying an established property. Your loan is released in stages, your repayments change as the build progresses, and the right structure can save you thousands in interest, tax and stamp duty.
I’ll help you compare lenders, understand progress payments and choose a loan that fits your budget, whether you’re a first-home buyer, upgrader or investor.
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15+ Years Experience | MFAA Accredited | Brisbane Mortgage Broker
How Construction Home Loans Work
With a traditional home loan, the lender advances the full loan amount at settlement. With a construction loan, the lender approves the total you need for land and build, but only releases the funds as each stage of the build is completed. This keeps your interest costs down while the home is being built.
Traditional Home Loan
The full loan amount is drawn at settlement, and you start making repayments on the total balance straight away. This is how most existing property purchases are funded.
Construction Home Loan
The lender considers the total amount needed for land plus construction, then releases enough for the land settlement first and pays the builder in stages as work is completed.
Progress Draws
During construction, payments go directly to your builder at each agreed stage. These are called progress draws, and they’re based on invoices and inspection reports.
Repayments While You Build
Most lenders only charge interest on the funds that have been drawn so far. Full principal and interest repayments usually begin after the final payment and handover.
Benefits of Building Rather Than Buying an Established Home
Lower Stamp Duty
When you build, stamp duty is usually calculated on the value of the land only, not the finished home. That can mean a significant saving compared with buying an established property.
Custom Design
You choose the layout, fixtures and finishes to suit your lifestyle. From open-plan living to extra storage, you’re not compromising to fit someone else’s design.
Lower Maintenance
Everything is brand new and covered by builder warranties and manufacturer guarantees. For the first few years, ongoing repairs are usually minimal.
Energy Efficiency
New builds must meet current energy standards and can easily incorporate insulation upgrades, solar and efficient heating/cooling to reduce long-term running costs.
Investor Tax Advantages
Brand new investment properties usually offer higher depreciation deductions and appeal strongly to tenants, which can improve both cash flow and rental demand.
First-Home Buyer Incentives
Many first-home buyers building a new home may qualify for the First Home Owner Grant and stamp duty concessions, subject to state-based rules and eligibility criteria.
Purchasing Vacant Land and Building a Home
Buying land and building can be a smart way to enter a new estate or growth corridor, while tailoring the home to your needs. It does, however, come with a few extra moving parts.
- Land contract and build contract need to work together for finance approval.
- Most lenders require a fixed-price building contract and council-approved plans.
- Site costs (such as rock, retaining walls or slope) can affect your total budget.
- Timing the sale of an existing home may require a bridging loan in some cases.
I’ll help you map out the finance structure from land purchase through to handover, so you know what to expect at each stage.
Your Six Construction Progress Stages
Your builder’s contract will set out a progress payment schedule. Most builds have six key stages, each with its own invoice and inspection requirements.
Deposit
The builder typically invoices around 5% of the total construction cost as a deposit. This is usually paid once the land has settled and the contract is signed.
Base / Slab
Site preparation, cutting, plumbing in trenches and pouring the slab. Once complete, the builder claims the base stage payment.
Frame
The building frame, roof trusses and structural bracing are installed. The shape of your new home starts to appear and the frame stage payment becomes due.
Enclosed / Lock-Up
Brickwork, roofing, windows, external doors and insulation are completed. Electrical and plumbing rough-ins are generally finished and the home becomes lockable.
Fixing
Internal linings, architraves, cornices, skirting, internal doors, cabinetry, tiling, wet areas and most fittings are installed. The property feels close to finished.
Practical Completion / Handover
Final painting, hardware, shower screens and robe fit-outs are completed. After the lender makes the final payment and you receive the keys, you move to standard repayments.
When a Construction Loan Might Not Be the Right Fit
A construction loan may not be suitable if:
- You don’t have a fixed-price building contract or the builder isn’t acceptable to the lender.
- The land has very high site-cost risk and your budget is already tight.
- You can’t comfortably cover variations or upgrades outside the contract.
- You want a turnkey solution with minimal involvement – an established property may be easier.
Planning Your First Home Build
If you’re building your very first home, these guides will help you understand deposits, timelines and government incentives in more detail.
Typical first-home buying timeline
See the key steps from saving a deposit through to settlement and moving in.
Top tips for first-home buyers
Practical ways to avoid common mistakes and put yourself in a stronger position.
Common mistakes to avoid
Learn what can go wrong with contracts, finance and timing when you’re buying or building.
How the home loan application process works
Understand what lenders look for and how to prepare a strong application.
Genuine savings explained
Find out how lenders assess your savings and what counts towards your deposit.
Buying with family or friends
Explore co-ownership structures if you’re planning to build with someone else.
QLD First Home Owner Grant
Everything you need to know about how the FHOG works for new builds in Queensland.
Government guarantee schemes
See what’s changing with guarantee schemes and how they might help you build sooner.
How to avoid paying LMI
Strategies that can help you reduce or avoid Lenders Mortgage Insurance where possible.
How to buy with little or no deposit
Options that may be available if you don’t yet have a full 20% deposit.
Complete first-home buyer loan guide
Start here for an end-to-end overview of deposits, grants and lender options.
What to expect as a new homeowner
Understand what changes once you move in and how to manage your loan well from day one.
Guarantor and family pledge loans
See how a family member’s equity can help with your deposit or avoid LMI.
First-home buyer next steps
Already downloaded a guide or booked a call? This page outlines what happens next.
Need to Stay in Your Current Home While You Build?
If you’re building a new home but want to stay where you are until it’s finished, a bridging loan may be worth exploring. The right strategy can help manage repayments while you own both properties.
Sell or buy first — which option is right for you?
Compare the pros and cons of building first, selling first or using a bridging loan structure.
Ready to Talk About Your Construction Finance?
Every build is different. I’ll help you compare lenders, structure your loan correctly, and plan for each stage of the build so there are no surprises with cash flow or approvals.
Book a quick call and we’ll run through your plans, estimated costs and borrowing capacity, then map out your next steps.
Check your construction loan optionsBuilding an Investment Property May Become More Attractive Under the 2026 Budget Changes
Construction loans are not just for first home buyers. For investors, a new build may become a more important strategy because the 2026 Federal Budget changes are expected to favour newly built investment properties over established investment properties.
From 1 July 2027, negative gearing is proposed to be limited mainly to new builds, while established investment properties purchased after Budget night may have rental losses quarantined rather than offset against salary or other income. This could make the structure of an investment purchase more important than simply choosing between fixed and variable rates.
1. Negative gearing may favour new builds
Investors buying or building a qualifying new property may still be able to offset rental losses against other income, subject to final legislation and tax advice.
2. New properties may offer stronger depreciation benefits
New builds can often provide higher tax depreciation deductions than older properties because the building structure and many fixtures are new.
3. Loan structure matters from day one
Investors need to consider deposit source, equity release, construction progress payments, interest-only options, buffers and how the investment debt is kept separate.
Why this matters for property investors
If the tax rules favour new supply, investors may need to think differently about whether they buy an established property, buy house and land, build a new dwelling, or use equity from an existing home to fund the deposit.
- New builds may receive more favourable tax treatment than established properties.
- Depreciation may improve after-tax cash flow, especially in the early years.
- Construction lending has different risks, timelines and approval requirements compared with buying an existing property.
- The right loan split can help keep owner-occupied and investment debt clearly separated.
Before committing to a construction investment loan, check the full picture
- Does the property qualify as a new build under the proposed rules?
- Will the lender accept the land, builder, fixed-price contract and valuation?
- Do you have enough buffer for delays, variations and interest during construction?
- Should the investment loan be interest-only or principal and interest?
- Have you obtained tax advice on negative gearing, depreciation and ownership structure?
General information only. This does not consider your personal objectives, financial position or tax circumstances. The 2026 Budget measures may be subject to final legislation. Speak with a registered tax adviser before relying on negative gearing, depreciation or capital gains tax outcomes.
Your trusted mortgage consultant, based in North Lakes and supporting clients across Australia.
Delivering tailored home loan advice for buyers and homeowners across Brisbane, Sydney, Melbourne, Gold Coast, Perth and Adelaide, with a focus on clarity, structure and long-term financial outcomes.
Specialising in residential lending, first home buyers, refinancing and investment property solutions, guided by experience and attention to detail every step of the way.
15+ Years Experience | MFAA Accredited | Brisbane Mortgage Broker
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