House Construction Finance

Building a new house requires more from a lender than a standard purchase. The loan needs to be structured to fund the build in stages, assessed against what the property will be worth when it is finished rather than what the land is worth today. Whether you are building your first home, constructing a new investment property, or rebuilding after a knockdown, the lender selection and application quality matter at every step. Settled Funding Group arranges house construction finance across bank and non-bank lenders, managing the process from first submission through to practical completion.

Who This Is For

• •Owner-occupiers building their first or next home on land they already own or are purchasing
• •Investors building a new home on a development site to rent out or sell upon completion
• •Knockdown rebuild clients who have demolished an existing dwelling and are ready to start construction
• •Those who have purchased land and are building under a house and land package with a volume builder
• •Buyers building an architect-designed custom home with a fixed-price contract
• •Borrowers purchasing land and beginning the build process as part of a single staged transaction

How House Construction Finance Works

House construction loans are drawn down in stages as the build progresses, from slab to practical completion. The lender approves the full loan amount upfront based on the on-completion valuation, but funds are only released as each milestone is reached and inspected. You pay interest only on the drawn amount during construction, which keeps costs lower than a standard mortgage during the build period. Joseph Farhat reviews your contract, land position, and income before selecting the right lenders from the 90+ panel, and manages every drawdown throughout the build.

A well-prepared application is the foundation of a smooth construction loan from slab to completion. See the Hurstville luxury home case study for an example of what a well-structured application for a new house construction looks like, and how the right preparation secured a major bank construction loan for a $2.9M luxury home build.

What Lenders Assess for House Construction Finance

• •Fixed-price contract with a licensed builder: major banks require an HIA or MBA fixed-price contract. Non-bank lenders can work with a broader range of contract types.
• •DA or building approval: formal planning consent must be in place before approval. An indicative assessment can be provided earlier, but the formal approval requires evidence of planning consent.
• •On-completion valuation: the lender's key assessment figure. The loan amount is based on a percentage of the estimated finished value, not just the land value or the construction cost.
• •Land title: the land must be registered in the borrower's name, or the land purchase and construction loan must be structured to settle simultaneously.
• •Income and serviceability: assessed against the full construction and any ongoing mortgage. If you are renting during the build, that cost is factored in.
• •LVR against on-completion value: most lenders fund up to 80 to 95% of the on-completion value depending on the lender and whether LMI is involved.

The House Construction Finance Process: What to Expect

1. 1.Initial assessment: share your land position, builder contract, and income with Settled Funding Group. Joseph Farhat reviews the full picture and identifies which lenders on the panel are best suited to your build before submitting anything.
2. 2.Application prepared with the fixed-price builder contract, council-approved plans, DA, income documents, and land title or purchase contract.
3. 3.Lender commissions an on-completion valuation. This confirms the finished value the approval is based on.
4. 4.Formal approval and loan documents issued, typically one to three weeks from submission depending on the lender.
5. 5.Construction drawdowns at slab, frame, lockup, fixing, and practical completion. Settled Funding Group coordinates each stage with the lender and the builder to keep the draw process moving without delays.

Indicative Finance Options

House Construction Finance Broker

Even a standard house build can run into widely different lender policies. Progress payment structures, builder accreditation, fixed-price contract requirements, on-completion valuation methods, and LVR caps all vary between lenders, and a borrower or build that one lender declines is often a comfortable fit for another. Banks apply rigid criteria around contracts and income evidence, while non-bank and specialist lenders take a more flexible view. A broker who knows which lenders suit your build, your contract, and 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, self-employed, or time-critical house 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 your income position, 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 to your first progress drawdown, 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 house construction loan is complex or has been declined elsewhere, talk to us early and we will tell you honestly what is achievable.