Master construction financing with stage payments and builder protection strategies
A construction loan releases funds in stages as your project progresses. Instead of receiving the full amount upfront, you get payments at key milestones (foundation, frame, lock-up, fit-out, completion). Interest is calculated only on drawn funds, reducing overall interest costs. Most construction loans require 20-30% deposit and have interest rates 1-2% higher than standard mortgages.
Construction loans are ideal for new builds, renovations, and development projects where you need flexibility and builder protection through staged payments.
Construction loans release funds in stages as construction progresses. Each stage requires builder certification and council inspection before payment is released. Interest is calculated only on the amount drawn, not the full loan amount.
Upon project completion, you refinance to a standard mortgage. This process is called "conversion" or "take-out." Construction-to-permanent loans combine both stages into one product, simplifying the process.
Foundation & Excavation (10-15%)
Site preparation, excavation, foundation pour. First major milestone requiring council inspection.
Frame & Structure (20-25%)
Timber/steel frame, roof installation, external walls. Largest payment stage, typically 20-25% of total.
Lock-Up (30-35%)
Windows, doors, internal walls, electrical/plumbing rough-in. Building is now weather-tight and secure.
Fit-Out & Finishing (20-25%)
Internal finishes, kitchen/bathroom installation, painting, flooring. Building nears completion.
Completion & Handover (10-15%)
Final inspections, council approval, occupancy certificate issued. Final payment released upon completion.
Project: Build new house on land in Sydney suburbs
Financing Structure
Stage Payments (12-month build)
Interest Cost (Construction Phase)
Upon completion, refinance to standard mortgage at 6.5% p.a. Interest savings vs upfront borrowing: ~$7,200 annually (7.5% - 6.5% on $720k).
Our mortgage brokers specialize in construction loans and can help you find the best financing for your project.
Real testimonials from satisfied customers
"Luke helped me get my first home loan. He was extremely helpful throughout the entire process and was on top of everything. Especially as being a first home buyer this was a confusing process but Luke was always available to answer questions I had and was very open and quick to note any changes to my approval process. Thanks heaps Luke. Will definitely use your services again!"
Jake Graceffo
31 Mar 2026