Construction loans, before you sign the build contract
A construction loan funds a build or major renovation in stages, the lender releases money as the builder completes each phase, and you generally pay interest only on what’s been drawn. FINEDGE Finance arranges construction lending across Western Sydney’s growth corridor, where half our suburbs — Box Hill, Tallawong, Rouse Hill and beyond — are being built right now.
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The basics
How a construction loan works?
- The loan is approved against the land plus the fixed-price building contract.
- Funds are released in progress payments at set stages, typically slab, frame, lock-up, fit-out and completion, after the lender verifies each stage is done.
- During the build you usually pay interest only on the amount drawn so far, which keeps costs down while you’re also paying rent.
- At completion, the loan typically converts to a standard home loan.
Get the finance right before the contract
The most expensive construction mistakes happen before the first brick: signing a build contract without knowing your true borrowing capacity, underestimating the costs that sit outside the contract (site costs, landscaping, driveways, variations), or leaving no buffer for the things that change mid-build. We assess the whole project — land, contract, extras and buffer, and tell you plainly what the numbers support before you commit to anything.
House-and-land packages, knock-down-rebuilds and major renovations each work slightly differently with lenders, and lender appetite for each varies across our 50+ panel. Matching the project to the right lender is most of the game.
Your questions
Frequently asked questions
Straight answers to what our clients ask us most.
Do I need a fixed-price building contract?
Most lenders strongly prefer one, and it makes your approval cleaner and your budget safer. If your builder works differently, talk to us early — some lenders have more flexibility than others.
What if my build costs change mid-way?
Variations are common, and they’re easier to handle if the loan was set up with a buffer from day one. That’s part of how we structure construction lending — expecting the build to behave like builds actually do.
Can I buy the land first and build later?
Yes — land loans and construction loans can be staged, and sometimes that’s the smarter order. The key is making sure the land purchase doesn’t exhaust the capacity you’ll need for the build.
Does the bank check the builder's work before paying?
Lenders verify each progress stage before releasing that payment — usually via inspection or documentation. It’s a protection for you as much as for them, and we manage the process so payments don’t hold up your builder.
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General information only, not financial advice. Finedge Finance provides credit assistance.