Construction-to-Permanent Loans

Most construction loans require a separate refinance application once the build is complete. That means a second valuation, a second set of fees, and a second round of lender assessment at a point when your focus should be on settling into your new home or leasing out your investment. A construction-to-permanent loan is structured differently: one facility covers the build phase, and at practical completion it rolls over into a long-term mortgage without a fresh application. Settled Funding Group arranges construction-to-permanent loans across bank and non-bank lenders for owner-occupiers and investors building to hold.

Who This Is For

• •Owner-occupiers building a new home who want to avoid a second application and revaluation after the build
• •Investors building to hold as a rental property who need the construction loan to convert into a long-term investment facility
• •Developers building small residential projects who plan to refinance at completion rather than sell
• •Borrowers who want cost certainty across both the construction period and the long-term holding phase
• •Those looking to avoid refinancing fees, a second valuation, and the uncertainty of reapplying post-construction

How Construction-to-Permanent Loans Work

The loan is approved upfront for both the construction period and the long-term rollover terms. During construction, funds are drawn in stages and interest is charged only on what has been drawn. At practical completion, the loan converts to a standard mortgage, either automatically or through a simple process with no new application. Joseph Farhat structures the facility to match your build timeline and your long-term holding strategy, across the 90+ lender panel to find the right fit for your income position and project type.

For investors building to hold, the transition from construction finance to a long-term investment loan needs to be seamless. See the Wallsend townhouse case study for an example of how a build-to-hold project was structured with the right lender, ensuring the loan rolled over into a long-term facility at completion without any disruption to the borrower's position.

What Lenders Assess for Construction-to-Permanent Loans

• •Standard construction criteria: DA or building approval, fixed-price builder contract, on-completion valuation, and income and serviceability.
• •Post-completion servicing: lenders assess whether your income or rental income is sufficient to service the long-term loan at the applicable rate, not just during the construction period.
• •On-completion valuation: the value at completion is the basis for the permanent mortgage terms. A strong valuation relative to the loan amount improves the rollover conditions.
• •Builder contract and timeline: lenders need confidence the build will complete on schedule and on budget, as the conversion to a permanent loan depends on practical completion.
• •Proposed long-term loan structure: whether the permanent loan is principal and interest or interest-only, and whether you want a variable or fixed rate at rollover, affects which lenders are most suitable.
• •Income type and documentation: investors with complex income structures may find non-bank lenders more accommodating on the post-completion servicing assessment.

The Construction-to-Permanent Loan Process: What to Expect

1. 1.Initial assessment: share your build plan, long-term hold strategy, and income position with Settled Funding Group. Joseph Farhat reviews both the construction and the post-completion servicing, then identifies lenders whose policy supports the full structure before anything is submitted.
2. 2.Application prepared with the builder contract, approved plans, income documents, and the proposed long-term loan structure.
3. 3.Approval issued covering both the construction phase and the rollover terms. In most cases this is one approval, not two.
4. 4.Construction drawdowns in stages from slab through to practical completion, coordinated by Settled Funding Group throughout the build.
5. 5.At practical completion, the loan converts automatically or with a simple rollover process. No second application or new valuation is required in most cases.

Indicative Finance Options

Construction-to-Permanent Loan Broker

Construction-to-permanent loans roll the build facility into a long-term mortgage at completion, and lender policy on how that transition works varies widely. Some lenders convert automatically on a single approval, others reassess at completion, and the rate, term, and conversion conditions differ sharply between banks and non-bank lenders. Builder accreditation, fixed-price contract rules, and on-completion valuation methods add further variation, and a borrower or build one lender declines is often a comfortable fit for another. A broker who knows which lenders offer a genuine single-approval conversion and suit your income position saves you time, avoids wasted applications and unnecessary credit enquiries, and gives you access to lenders most borrowers cannot approach directly. For complex or time-critical builds, a broker knows where the deal will get done.

Settled Funding Group represents you, the borrower, not the lender. Joseph Farhat reviews your build plan, your builder contract, and how you want the loan to behave after completion, then matches your scenario to the right lender from our 90+ panel and negotiates terms on your behalf. We prepare and manage the application from assessment through the construction drawdowns to conversion, and for unique scenarios we can introduce you to private finance options. As a broker, we are typically paid by the lender on settlement, so in most cases there is no direct cost to you. If your construction-to-permanent loan is complex or has been declined elsewhere, talk to us early and we will tell you honestly what is achievable.