As-if-complete valuation
The lender may value the land and proposed completed home using plans, specifications, contract price, comparable sales and site information.
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Construction loans · Victoria
Construction finance planned around every stage of your build
Chris Berry helps Victorian borrowers compare construction-loan options from more than 40 lenders, prepare the required documents and understand how funds may be released as their project progresses.
Construction-loan guidance across Victoria
The short answer
What does a construction loan mortgage broker help with?
A construction loan mortgage broker compares lenders that may suit your project, budget, deposit, builder and property. They help organise the application, costed plans, building contract, permits and valuation information, then explain the lender’s progress-payment process and conditions.
Plan before works begin
A construction loan is a process, not one settlement
Unlike a standard purchase loan, construction finance commonly involves an initial approval followed by staged drawdowns. The budget, contract and lender requirements need to remain aligned throughout the build.
- Model the land, build, site costs and a practical contingency before applying
- Compare lender policy for the builder, contract, property and proposed loan-to-value ratio
- Understand interest during construction and the change to regular repayments after completion
- Prepare documents early so progress claims are less likely to stall
Progress drawdowns
Approved funds are usually released against completed stages and acceptable invoices, inspections or valuation evidence.
Interest during the build
Interest is generally charged on funds already drawn rather than the entire approved construction amount, subject to product terms.
Cost and timing buffers
Variations, delays, site costs and items outside the contract can create a shortfall. Available cash and contingency should be identified before work begins.
Compare the pathway
Construction loan or ordinary home loan?
The right facility depends on whether the security is complete and ready to occupy or whether funds must be released as building work is completed.
Decision point
Construction loan
Standard home loan
Funding
Approved construction funds are released in stages.
Loan funds are generally advanced at settlement.
Valuation
May consider land plus the proposed as-if-complete home.
Usually values an existing completed property.
Interest
Generally applies to the amount drawn to date.
Applies to the funded loan balance after settlement.
Documents
Plans, specifications, fixed-price contract and permits may be required.
The sale contract and property information are usually central.
How it works
From costed plans to the final drawdown.
- 01
Map land value, contract price, exclusions, available cash, deposit, contingency and expected timeline.
- 02
Compare suitable lender policy and obtain approval using the contract, plans, permits and valuation evidence.
- 03
Meet conditions, manage stage claims and prepare for the loan to convert after practical completion.
Common questions
Clear construction-loan answers for Victorians
How do construction loans work in Victoria?
The lender approves a total facility based on the borrower and project, then commonly releases construction funds in stages after required evidence is supplied. The precise stages, inspections and documents vary by lender and contract.
How much deposit do I need for a construction loan?
It depends on the land value, total project cost, completed valuation, available cash, builder and lender policy. Higher-LVR applications may involve Lenders Mortgage Insurance and tighter requirements.
Do I make full repayments while building?
Many construction products require interest payments on the amount drawn during construction, then convert to principal-and-interest repayments after completion. Product terms and any interest-capitalisation arrangements differ.
What documents will a construction lender request?
Common requirements include a signed building contract, plans, specifications, permits, builder details, insurance evidence, costings and normal income and liability documents. Additional items depend on the project.
Can a broker guarantee the build cost or completion date?
No. A broker can help with credit and loan administration but does not supervise construction or provide building, engineering or legal advice. Independent inspections and professional advice may be appropriate.
Reviewed 14 September 2026 by Chris Berry. General information only and not financial, legal, building, engineering or tax advice. Lending criteria, valuations, interest treatment, contracts, progress payments and acceptable builders vary. Approval, cost and completion dates are not guaranteed.
Official information: Consumer Affairs Victoria building contracts · Consumer Affairs Victoria progress payments · Consumer Affairs Victoria plans and permits
Ready when you are
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