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Building A New Home with Construction Home Loan

Construction Home Loan

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So you are building a new home and you need a Construction Home Loan. Where do you start? Your mortgage broker What If We Finance can help. As the leading independent mortgage broker, we have extensive experience with construction finance.

It is important to note not all lenders lend for construction and have different fees and charges.

Construction home loans are assessed on the same basis as any other home loan. The bank will look at your capacity to repay the loan, income and also asset and liability position. The principal difference when building a home is the way the home loan behaves.

When building a home the entire home loan is not drawn at once but the bank will pay the builder over 6 stages and these typically are:

  • Buying the land
  • Slab or foundation
  • Frame
  • Lock up
  • Fixing
  • Final
young couple signs home construction loan

This means the bank pays each phase progressively as each pass is completed. Typically, with construction home loans you only pay interest on the amount that is physically drawn down during construction until the completion of your building project. You can then nominate the type of loan the construction reverts to. For example, at the end of the construction period your loan can be fixed, variable or split.

At the completion of each phase, the bank or a valuer will normally inspect the project to ensure work is complete according to the requirements set out in the fixed price building contract. The bank will then make the progress payment. 

Normally there may be a charge for each progress payment and your independent mortgage broker can explain this further.

For construction home loans the lender will want to see the following information:

  • Contract to buy the land
  • A fixed price building contract. It is extremely hard to obtain. Finance as an owner-builder
  • Council approved plans
  • Builder’s insurance and warranty information

The bank will value the property being built and typically this may be land value plus construction costs. For example, if the land is purchased for $200,000 and construction costs are $200,000 the bank may value the project at $400,000. But if the market value of the finished product is less than $400,000 the bank will value the project at a lower amount.

Banks will lend up to 90 to 95% of the bank assessed value of the project for owner-occupied construction.

What If We Finance has considerable experience in helping borrowers with construction finance. We will work with you to ensure all bank requirements are met and take the stress out of finance so you can enjoy your new home. Contact us today to find out more.

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176 reviews on
Matthew B
Matthew B
2022-06-05
Looking at the reviews for What If We Finance, it comes at no surprise to see so many 5-stars. Spiro handled the mortgage part of my girlfriend and I purchasing our first home. He made himself available to us around the clock and ensured that we were across the entire process and felt as comfortable as possible. We're very fortunate to have gone about buying our first home with Sprio and we'd be more than happy to use him for future purchases and to refer on to family and friends. A big shout out to Agnes also who busily works away in the background and also does an incredible job. You guys are the best!
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hari gowtham
hari gowtham
2022-06-03
Very happy with the results from Spiro from start to finish. Spiro and his team are very knowledgeable and have a very quick turnaround time. Couldn't be more happier with the service. Definitely my go-to person for upcoming purchase.
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Gary Shekhter
Gary Shekhter
2022-06-02
Great broker and trustworthy. Honestly had seen 5 brokers and fund this wonderful guy. Who helped from start to finish fast and had our loan in no time at all. Thank you again champ you did an amazing job
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Leonie Kemp
Leonie Kemp
2022-05-29
Thank you Spiro and Agnes for helping with the purchase of my first home. I needed to arrange finance quickly and Spiro did a fantastic job letting me know the best options for me and pushing to get the pre-approval so I didn't miss out on purchasing my home. Everything went very smoothly, thanks for helping make my first property purchase straightforward.
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S S
S S
2022-05-28
Thank you Spiro and team for your help in financing the mortgage for the recent property purchase. Spiro provided timely advise, guided me on the process and was swift in processing the documents. His friendly attitude makes the process even better. Thank you once again.
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Anita Naughton
Anita Naughton
2022-05-27
As a first home buyer I had very limited knowledge on what I needed to do. I searched for a broker and What if we finance stood out due to reviews. I had my first session with Spiro and never looked back! The whole process was seamless, I felt supported and could always connect with Spiro when needed. Spiro and Agnes are experts in what they do and I would highly recommended anyone looking for finance to choose What if we finance. I will be a lifelong customer and look forward to buying our next house with their support.
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Mahmoud Al Kilzi
Mahmoud Al Kilzi
2022-05-25
Spiro & his team did a great job by getting my loan sorted in time. I would recommend them to family & friend. Great work guys much appreciated.
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Rebecca Zeeman
Rebecca Zeeman
2022-05-20
Spiro and Agnes provided great help and advocacy in getting us our home loan. We felt they were always available and were super efficient in getting it all done on time! The process was so simple and without stress thanks them both.
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Irish Azcuna
Irish Azcuna
2022-05-09
I can’t thank Spiro and Agnes enough for making my first home purchase so efficient, stress-free and seamless! If I could give more than 5 stars I would. As a first home buyer applying for one or the government’s schemes, my situation would have been so complicated that I never imagined being able to complete the process in such a short time. Spiro’s in-depth knowledge, invaluable and always-available support, and genuine willingness to help get me the right mortgage for my situation, made everything possible. His pragmatic advice even helped me decide on the right property for us, which would help us achieve our long-term goals. I highly recommend Spiro and his team. We will definitely engage their service again for our next property. They are the best!
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Renee Briggs
Renee Briggs
2022-05-02
Spiro is reliable, has your best interest as his top priority and is fast to get great results. We wouldn't ask anyone else for their professional opinion- Spiro is the best in the business.
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