Land and Construction Loans


A land and construction loan provides funding for building property or extensive renovations in a way that means you have the lowest possible repayments during the construction phase. Because a land and construction loan is a little different to approval for an established home purchase, there will usually be two approvals, so often the land and building purchase will need to settle separately.

Land and construction loans generally operate as an interest-only facility with a variable interest rate during the construction period, before reverting to the standard home loan package you have negotiated with your lender. During the building or construction period, you only pay interest on the part of the home loan that has been drawn down or paid out.

If you’re looking at a house and land package, you will generally use a regular residential home loan and not a construction loan to finance your purchase.

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