How does a construction loan work?

Land settles first. Then progress payments to builder. Interest on drawn portion only.

Do all lenders do construction loans?

No — specialist lenders only. Some prefer H&L packages; others custom builds.

How much deposit for land + build?

Typically 20% of total project. Some lower with LMI.

Owner-builder construction loans — possible?

Possible but harder. Need higher deposit and project management proof.

Are halal construction loans available?

Limited — most Islamic providers prefer established property. Some H&L works.

Home Loan Refinancing

Who this guide is for

Buyers planning to purchase land and build a new home — house-and-land package buyers, custom-build buyers, owner-builders.

House-and-land package buyers in Western Sydney growth corridors
Custom-build buyers using their chosen builder
Owner-builders managing the project themselves
South Asian families wanting newer-build homes

The local picture

Construction loans are more complex than regular mortgages. Multiple stages, progress payments, lender approvals at each milestone, build contract requirements. Many buyers don't understand the process until problems arise.

How Mortgagefy helps locally

Mortgagefy works with construction loans regularly. We coordinate land settlement, build contract finance, progress payment schedules, and final occupancy approval. Free advice.

How it works — 4 simple steps

Free land + build chat

20-minute call about your land, builder, and build plans.

Compare construction lenders

We identify lenders comfortable with your project type.

Application support

We coordinate land settlement, build contract, progress draws.

Move in to your new build

You move in once construction is complete.

Frequently asked questions

We use offer letters and vesting schedules to value RSUs conservatively. We present current vesting value + projected future vesting as a 3-5 year income average. This gives lenders confidence in your income stability while accounting for market volatility.

Both. We work with W2 employees, 1099 contractors, and consultants. For contractors, we use 2 years of tax returns plus business financials. We have lenders who specialise in contractor income—they understand the variability.

Unvested options have zero value for refinancing. We count only vested equity. If you have a 4-year vest, we use 25% of the grant value (what's vested) plus a conservative projection of future vesting.

If you've been in your new role 6+ months, most lenders will refinance. We'll use your offer letter plus 6 months of pay stubs. If less than 6 months, it's harder but possible with specialist lenders.

Yes, if you have 2+ years of bonus history. We average the past 2 years and present it conservatively. Some bonuses get counted at 50% to be conservative with variable compensation.

ESPP is counted as deferred compensation. If your company matches or you have a discount, we value it as part of total compensation package.

Talk to us about land + build finance

Free 20-minute call about your construction project.

Start Your Free Assessment Call 0432 634 648

Get your personalised answer in 2 minutes

Free, no obligation. We'll match you with the right lender for your situation.

Model your scenarios: Use our free home loan calculators to estimate borrowing capacity, repayments, and savings.

Home Loan for Buying Land and Building Your Home in Australia