Keystone Home Loans

Construction Loans

Knockdown rebuilds, extensions, duplexes and developments, funded in stages as you build.

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5.0 Stars Based on 48 user reviews

Building and construction loans

Funding your project from start to finish

Building your dream home or starting a new construction project is exciting, but it needs the right finance to bring it to life. A construction loan funds your project in stages, with payments released as the work progresses.

Whether you're building a new home, adding an extension or taking on a larger development, we guide you through the whole loan process. From a competitive rate to managing the release of funds as the build goes on, we help your project run smoothly.

With access to a wide range of lenders, we find the loan terms and repayment structure that suit your project, and set your loan up to match your timeline and budget.

Building your first home on a new block? Our building your own home page walks you through that journey, from land to handover.

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Newly finished living area with floor-to-ceiling windows

The basics

How a construction loan works

A construction loan pays for the build as it happens, not all at once. These are the parts that matter most.

  • Paid in stages

    Instead of one lump sum, the lender pays your builder in progress payments as each stage is finished. In NSW, progress payments must match work actually done, not time on the job.

  • Interest on what's drawn

    You normally pay interest only on the amount drawn so far, so repayments start small and grow as the build goes on. Many lenders offer interest-only repayments during construction.

  • Your money goes in first

    Lenders generally want your own contribution, such as your deposit and any costs the loan doesn't cover, spent before they release their funds.

  • Valued as if complete

    The lender values the land plus the finished home using your plans and building contract. That 'on completion' value sets how much you can borrow.

  • A capped deposit to the builder

    Under NSW home building law, the deposit a builder can ask for is capped at 10% of the contract price.

  • Insurance before you pay

    For residential work over $20,000, your builder must give you a Home Building Compensation certificate before asking for any payment, including the deposit. Your lender will usually ask for it too.

Every kind of build

Projects we can help you finance

  • Knockdown rebuild

    Knock down your current home and build a new one on the same block. The equity in your land often covers the deposit. Plan for demolition, approvals and where you'll live during the build.

  • Extensions and major renovations

    Adding a storey, a wing or a granny flat? Larger structural work is often funded with a construction loan and progress payments. Smaller jobs may suit a top-up or equity release instead: see renovating your home.

  • A new home on land you own

    Already own the block? A construction loan funds the build. First home buyers may also be eligible for grants and concessions, covered on our building your own home page.

  • Duplexes and dual occupancy

    Build two dwellings on one block to keep both, live in one and rent the other, or sell one. Lenders assess the finished value of both dwellings and your plans for each.

  • Small developments

    Townhouses or a handful of units? Lenders look at the feasibility, your experience and the builder. Loans to a development company are assessed as commercial lending.

  • Larger commercial projects

    Bigger developments are funded differently again, and lenders often ask for more equity, presales and a detailed feasibility. We'll tell you what lenders need. See also commercial loans.

Before you commit

Things to watch out for

  • Contract type matters

    Lenders prefer a fixed-price building contract with a licensed builder. Cost-plus contracts and owner-builder projects have fewer lender options.

  • Variations and cost blowouts

    In NSW, variations must be in writing, signed, and show the cost impact. Extra costs usually come from your own pocket first, so keep a buffer.

  • Approvals take time

    You'll need council approval or a complying development certificate, and lenders generally want approved plans before they finalise the loan. Delays add holding costs.

  • A deadline to finish

    Construction loans usually set a timeframe for the build. Delays mean more interest while you wait, and can bring fees or a reassessment.

  • Somewhere to live

    With a knockdown rebuild you'll pay rent or other housing costs on top of the loan. Build them into your budget, not just the construction cost.

  • Stages that line up

    Check the builder's licence, and make sure the contract's progress payment stages line up with the stages your lender will pay.

How we help

How we arrange your construction loan

Phillip stays with you from the first budget to the final progress payment.

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  1. Free chat about your project

    Tell us what you're building, where, and your budget and timeline. We work out your borrowing power and how much of your own money the project needs.

  2. Pre-approval before you commit

    Where possible, we get a pre-approval before you sign the building contract, so you know the budget works.

  3. Match the lender to the build

    Lenders differ on knockdown rebuilds, dual occupancy, contract types and payment stages. We compare options from our panel of 50+ lenders and shortlist the ones that suit your project.

  4. Contract, plans and valuation

    We send the lender your signed contract, approved plans and specifications, and manage the 'on completion' valuation through to formal approval.

  5. Progress payments

    As each stage is finished, your builder invoices and you authorise the payment. We help with the lender's forms and follow up so payments aren't held up.

  6. Completion and beyond

    After the final payment your loan moves to normal repayments. We review your rate once the home is finished.

Testimonials

See what clients say about our service

Google

5.0 Stars

Based on 48 user reviews

Darren W.

Darren W.

“Refinanced through our mortgage broker and couldn’t be happier. Phillip secured us a great interest rate, helped consolidate our loans, and ended up saving us a heap of money each month. Everything was explained clearly and the process was smooth from start to finish. Highly recommend.”

Michael D.

Michael D.

“Phillip was amazing. Not only did he help us find the loan we desired, he was proactive with our conveyancer, the bank and all other parties involved to make sure we had our i's and t's, ticked and crossed. As a first home buyer this was invaluable. Thankyou Phillip for helping us with our first home.”

Julie H.

Julie H.

“Phillip was great to work with! Helped us with refinancing and obtaining the best rate in the market. He was very efficient and made the whole process very easy. Would recommend him to anyone looking for a mortgage broker.”

Frequently Asked, Clearly Answered

Yes, many lenders offer them. The loan is secured by your land, and the equity in it can often cover the deposit. The lender values the land plus the finished home and pays for the build in stages. You'll need approvals and a signed building contract before the loan is finalised.

It depends on the size of the job. For major structural work under a builder's contract, a construction loan releases funds in stages and the lender can lend against the value once it's finished. For smaller projects, a top-up or equity release may be simpler. We compare both for your numbers.

Often, yes. Lenders look at the finished value of both dwellings, your plan for each one and whether you can service the loan until one sells. If you plan to sell, some lenders treat it as a development, which changes the options. Tell us your plan up front.

You can start with a pre-approval. Lenders generally need approved plans and a signed building contract before formal approval and the first progress payment. Allow time and money for the development application or complying development certificate.

Yes. A loan to an individual to buy land and build homes is generally regulated consumer credit, even if you plan to rent or sell them. Loans to companies aren't covered by the credit laws and are assessed as commercial loans. Your accountant can advise on the right structure.

Most people rent or stay with family. Budget for rent on top of the construction loan interest, and allow for delays. If you're buying somewhere new before selling your current home, a bridging loan may help.

Didn’t find your answer?

Work with Phillip on your build

He’s here to guide you personally through every step, comparing 50+ lenders so your loan process is smooth and stress-free.