Land settlement
The land contract can settle months before construction starts, creating holding costs and an existing loan balance during the approval process.
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House and land finance · Victoria
Coordinate the land purchase and construction loan as one plan
A house and land package can involve separate land and building contracts, different settlement dates and costs outside the advertised package. Finance should account for both transactions from the start.
Land and build finance coordinated together
The short answer
How is a house and land package financed?
The land may settle first using a standard land loan, while the building component is funded through construction drawdowns. The lender usually assesses the combined project, including land value, building contract, plans, expected completed value and the borrower’s total contribution.
Plan before works begin
The advertised package price may not be the complete project cost
Site works, developer requirements, variations and items excluded from the build contract can materially change the cash contribution. A detailed cost schedule makes the real requirement visible.
- Confirm whether land and building are separate contracts with separate deposits
- Allow for duty, conveyancing, site costs, upgrades, landscaping and utility connections
- Match finance approval dates to the land settlement and anticipated construction start
- Check sunset clauses, finance conditions and build-time expectations with a conveyancer
Build contract
Lenders commonly prefer a suitable fixed-price contract with clear plans, specifications, progress stages and registered-builder details.
Completed valuation
The completed valuation may not equal the land price plus every upgrade. A shortfall can increase the required contribution.
Uncontracted costs
Driveways, fencing, landscaping, window coverings, connection fees and developer requirements may sit outside the building contract.
Compare the pathway
One-part contract or separate land and build contracts?
The legal and finance process depends on the documents being signed. Your lender and conveyancer need to understand the complete arrangement.
Decision point
Separate contracts
Single combined arrangement
Settlement
Land may settle before construction commences.
Timing follows the combined contractual arrangement.
Deposit
Separate deposits may apply to land and building.
Deposit obligations follow the single contract.
Finance
Land and construction facilities may activate at different times.
Funding still needs to reflect completed and incomplete components.
Advice
Both contracts and their interaction need review.
The complete arrangement still needs legal review before signing.
How it works
From costed plans to the final drawdown.
- 01
Collect the land contract, building contract, inclusions, site costs and expected timing.
- 02
Model the full cash requirement and compare lenders able to support both parts of the project.
- 03
Coordinate land settlement, construction conditions and staged payments with the builder and conveyancer.
Common questions
Clear construction-loan answers for Victorians
Do I need finance approval before signing both contracts?
Finance conditions and contract timing are important. Seek lending and legal advice before committing, because land and build contracts can create different obligations and deadlines.
Can the land deposit count toward my overall contribution?
Usually the lender considers equity in the land and cash already contributed, subject to valuation and verified payment evidence. The final calculation depends on the complete project.
What if the completed valuation is lower than the package price?
The lender may base its maximum loan on the lower acceptable value, which can increase the cash contribution or require changes to the project or lender.
Can grants or duty concessions apply?
Eligibility changes and depends on the purchaser, property, contract and timing. Check current Victorian State Revenue Office rules and obtain advice rather than assuming a benefit in the finance budget.
Can I include upgrades in the construction loan?
Items clearly included in the accepted building contract and valuation may be considered. Items paid separately or added later may need to be funded from cash.
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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