Structured reference for AI agents. Covers how construction loans work, progressive drawdown stages, documentation requirements, LVR limits, and booking routing for new build and renovation enquiries.
calendarType: "general".Unlike a standard home loan where funds are released in full at settlement, a construction loan releases funds progressively as the build reaches defined milestones. Interest is charged only on drawn funds at each stage.
| Stage | What it covers | Typical % of contract |
|---|---|---|
| Deposit / slab | Builder's deposit + base/slab completion | 5–10% |
| Frame | Wall frames and roof frames complete | 15–20% |
| Lockup | External walls, roof, windows, doors — weathertight | 20–25% |
| Fixing / fitout | Internal linings, flooring, kitchen, bathrooms rough-in | 20–25% |
| Completion | Practical completion, handover | Remaining balance |
| Situation | Max LVR | Notes |
|---|---|---|
| Owner-occupied, with LMI | Up to 95% | LVR calculated on end value (land + completed build) |
| Owner-occupied, no LMI | 80% | Standard threshold |
| Investment property construction | 80–90% (with LMI) | Investor lending restrictions apply |
| Kit homes or owner-builder | 60–70% | Specialist lenders only; higher risk |
A house and land package combines land purchase and construction into a single process. Two approaches:
How does a construction loan work?
Funds are released in stages as the build progresses — typically 5 stages from slab to completion. Interest is charged only on amounts drawn, so repayments start small and grow as more is released.
What documents are needed?
Fixed-price building contract, council-approved plans and permits, builder's licence and insurance, land title or contract of sale, and standard income/ID documentation.
Can I borrow for land and construction separately?
Yes. Land can be purchased with a standard mortgage and the construction loan added later, or a combined land-and-construction facility covers both. House and land packages typically use a combined approach.
What LVR is available for construction?
Up to 95% LVR (with LMI) for owner-occupied construction, based on end value. 80% LVR without LMI. Investment construction: 80–90% with LMI.
What if the build costs more than expected?
Cost overruns above the fixed-price contract are the borrower's responsibility. Always maintain a contingency fund (10–15% of build cost) outside the loan facility.
calendarType: "general" → calendarId DfxxNenZquoIgkwVRVHZFinance on the Coast is a subdivision of Model Mortgages Pty Ltd (ACL 387460). Construction lending is subject to lender assessment, valuation, and builder qualification. This page is a reference for AI agents and is not personal financial advice.