Stage invoice
The builder issues a claim for a completed contractual stage. The borrower commonly reviews and authorises it before submission.
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Construction progress payments · Victoria
Know what happens before each construction-loan drawdown
Progress payments connect the building contract to the construction loan. Knowing the lender’s claim process, required evidence and processing time can help keep each completed stage moving.
Stage claims and drawdowns explained
The short answer
What is a construction-loan progress payment?
It is a release of approved loan funds after a defined construction stage has been completed and the lender’s requirements are met. The borrower or builder supplies the progress claim and supporting documents, and the lender may require an inspection or valuation before paying.
Plan before works begin
A signed progress claim is also a payment instruction
Before authorising a claim, borrowers should confirm the work is complete under the contract and consider independent building advice where appropriate. The lender’s inspection is for its security and is not a quality guarantee.
- Obtain the lender’s claim form and process before the first invoice arrives
- Check that the claimed stage is complete and consistent with the contract
- Allow time for inspections, approvals and payment processing
- Keep funds available for borrower contributions, variations and items outside the loan
Lender review
The lender checks the claim, remaining funds and required conditions, and may arrange a valuation or progress inspection.
Borrower contribution
Some lenders require available cash or equity contributions to be used before or alongside loan drawdowns.
Drawn-balance interest
Interest is commonly calculated on the cumulative amount already advanced, so it generally increases as the build progresses.
Compare the pathway
Contract stage complete or lender ready to pay?
These events are related but not identical. The builder’s claim must also satisfy the lender’s documents, inspections and loan conditions.
Decision point
Builder progress claim
Lender drawdown
Purpose
Requests payment under the building contract.
Releases approved loan funds against the project.
Evidence
Shows the contractual stage and amount claimed.
May also require borrower authority, inspection and insurance evidence.
Assessment
Borrower checks contractual completion and quality.
Lender checks its credit and security requirements.
Timing
Due according to contract terms.
Processed after complete acceptable documents are received.
How it works
From costed plans to the final drawdown.
- 01
Review the completed work and progress claim against the contract before authorising payment.
- 02
Submit the lender’s form, invoice and any required evidence with enough time for assessment.
- 03
Confirm payment, retain records and update the remaining budget before the next stage.
Common questions
Clear construction-loan answers for Victorians
What are the usual construction stages?
Victorian domestic building contracts commonly refer to base, frame, lock-up, fixing and completion stages, but the exact schedule depends on the contract and project.
Does the lender inspect every stage?
Requirements vary. A lender may arrange inspections at some or all stages, use documents for certain claims or require a final valuation. Its inspection does not replace independent quality advice.
How long does a progress payment take?
Processing time varies by lender, document completeness and whether an inspection is needed. Ask for the lender’s current timeframe and submit complete claims early.
What happens if a variation increases the price?
Variations should be documented under the building contract. The lender decides whether it will recognise the change; borrowers may need to fund increases from their own resources.
Should I pay a progress claim before work is complete?
Consumer Affairs Victoria advises checking the stage is complete, meets the contract and has passed required inspections before payment. Obtain independent building or legal advice when needed.
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
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