Building a new home? WJ Home Loans structures your construction loan so funds are released progressively at each build stage — helping you manage cash flow and keep your project on track.
A construction loan is a type of home loan designed for building a new property rather than purchasing an existing one. Unlike a standard mortgage where the full loan amount is drawn at settlement, a construction loan releases funds in stages — known as progress draws — as each phase of the build is completed.
This staged drawdown structure means you only pay interest on the funds drawn at each stage, rather than the full loan amount from the start. Once construction is complete, the loan typically converts to a standard principal and interest home loan.
WJ Home Loans works with you and your builder to structure a construction loan that aligns with your build contract, timeline and budget — and helps you understand what's required at each draw stage.
Understanding how funds are released and how interest is charged is essential before starting your build.
Funds are released in stages aligned to your building contract — typically slab, frame, lock-up, fixing and practical completion. You only pay interest on drawn funds.
During the build phase, most lenders charge interest only on the portion drawn. Repayments are typically lower until construction completes.
On practical completion, your construction loan converts to a standard home loan (variable or fixed, P&I or IO) based on the product you selected.
Most lenders require a registered builder and a fixed-price building contract. The contract value forms the basis of your borrowing amount.
For house and land packages, the land and construction components can often be combined into a single loan for simplicity.
It's common to maintain a contingency of 5–10% above the build contract for variations and unexpected costs. We'll help you factor this into your borrowing plan.
Construction loans have more complexity than standard home loans. We understand the draw schedule process, builder documentation requirements and lender timeframes.
Not all lenders offer construction loans and policies vary significantly. We identify lenders whose products suit your build type, timeline and budget.
We help you understand what documentation is required — including the building contract, council approvals and builder's insurance — and manage the process throughout.
Interest-only during construction means lower repayments while your home is being built. We'll model your repayment profile across the build period and post-completion.
We're paid by the lender, not you. We'll always disclose upfront commissions and trail so there are no surprises.
We'll review your build contract, land purchase and budget to identify the most suitable construction loan options across our lender panel.
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Construction loans have unique milestones. Here's how WJ Home Loans guides you through the process from pre-approval to practical completion.
We review your land purchase, building contract, deposit and timeline — assessing your borrowing capacity and suitable loan options.
We secure pre-approval covering your land and construction costs, so you can proceed with confidence and settle on the land component.
As each build stage completes, we liaise with the lender to process the progress draw — ensuring funds are available when your builder needs them.
On practical completion, the loan converts to your chosen ongoing product. We'll review your options at this point and ensure a smooth transition.
A construction loan releases funds progressively in line with build stages, rather than in a lump sum at settlement. You pay interest only on the amount drawn during the build period — typically resulting in lower repayments while your home is being built.
Key documents typically include a fixed-price building contract signed by a registered builder, council-approved plans and permits, a builder's public liability and home warranty insurance certificate, and your standard income and financial documents. We'll guide you through the full checklist.
Yes — house and land packages are one of the most common construction loan scenarios. The land and build components can often be combined into a single loan. Timing of the land settlement relative to the build start is important — we'll help you structure this correctly.
Most lenders allow some flexibility, but extended construction periods beyond the original timeframe may require lender approval or a loan extension. We'll monitor your build progress and engage the lender proactively if delays arise.
Most lenders require a fixed-price building contract with a registered builder. Cost-plus contracts are generally harder to finance. Owner-builder arrangements are assessed differently and not all lenders will consider them — we can advise on your specific situation.
Yes — knockdown-rebuild projects are a common use case for construction loans in established suburbs. The existing property (if owned) may provide security while the build proceeds. We'll help you structure the transaction appropriately.
Our team of brokers is happy to talk through your situation — no obligation and no pressure.
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No-obligation assessment. We compare options across our lender panel for your construction project.
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