Construction Loans 101 - How it works

Here’s what you need to know about construction loans - they’re not your standard mortgage.
Unlike traditional loans that release the full amount at settlement, construction loans are drawn down in stages, in line with your builder’s progress.

The 5 Key Construction Stages

Slab Stage
Foundations are poured. First progress payment released.

Frame Stage
Walls and roofing go up. Bank inspects, then releases the next payment.

Lock-up Stage
Doors, windows, and external walls are installed—your build is now secure.

Fixing Stage
Time for interiors - kitchens, bathrooms, cabinetry, and fittings begin.

Completion Stage
Final inspection done. Last payment is made. Your property is now rent- or move-in ready.

What You Should Know

It’s not like a regular loan.
You won’t get the full amount upfront - funds are released in stages as the build progresses.

Interest-only during construction.
You’ll usually only repay the interest until the build is complete.

Inspections at every stage.
Before each payment is released, a bank-appointed inspector checks the work’s been done to standard.

Cash flow is easier to manage.
You’re not repaying a full mortgage while your home is still being built.