Question 1

How do construction loans work?

Accepted Answer

A construction loan draws funds in staged progress payments (slab, frame, lock-up, fixing, completion) as your builder reaches each milestone. You pay interest only on the amount drawn.

Question 2

What deposit do I need for a construction loan?

Accepted Answer

Most lenders require a 20% deposit (or 5–10% with LMI) of the total project cost — land plus build.

Question 3

How are progress payments made?

Accepted Answer

Your lender inspects each stage, then pays the builder directly. You do not receive the funds. A construction loan requires a fixed-price building contract and a registered builder.

Question 4

Can I build with a 5% deposit?

Accepted Answer

Some lenders accept a 5% deposit with LMI, and the First Home Guarantee can apply to new builds. Eligibility depends on the lender and the project.

Question 5

What costs should I budget for beyond the build?

Accepted Answer

Land, stamp duty, council fees, architect and engineering, site costs, and interest during construction. We itemise the full picture before you commit.

Construction loans in Australia, without the guesswork.

Frequently Asked Questions