Construction Loans Dubbo | Build or House & Land Finance

How a construction loan actually works

A construction loan doesn't hand you the full amount at settlement. The lender releases it in stages as your builder completes each phase, and you only pay interest on what's been drawn so far.

That means your repayments start small and grow as the build progresses. Once the final inspection is signed off, the loan converts to a standard principal and interest home loan.

If you're buying land first, that settles as a normal purchase, and the construction facility begins afterwards. We structure both parts together so there's no gap between them.

The five progress payments

Slab — foundation poured and base stage complete
Frame — timber or steel frame erected and inspected
Lock-up — external walls, roof, windows and doors in place
Fit-out — internal fixtures, cabinetry, plumbing and electrical
Practical completion — final works finished and inspected before handover

Each release needs an inspection and lender sign-off before the money moves. Delays here are the single most common reason a build stalls, and builders understandably don't keep working when they haven't been paid. We manage the drawdowns rather than leaving you and your builder to chase the bank.

What we check in your builder's contract

Not every fixed-price contract is one, and lenders won't fund what isn't in it. Before you sign, we look at:

• Whether the contract total matches what the lender will value the finished home at

• Site costs — excavation, rock removal, retaining walls and service connections

• Driveways, landscaping, fencing, floor coverings and window furnishings, commonly excluded

• Provisional sums and prime cost items, which are estimates rather than fixed amounts

• Whether the progress payment schedule matches what your lender will release, and when

• Whether you need a contingency buffer, and how big it should be

The gap between a contract price and the true finished cost is where most builds go over budget. Finding it before you sign is worth considerably more than finding it at lock-up.

What to have ready

• Your fixed-price building contract, or a detailed quote

• Council-approved plans and specifications

• The land contract if you haven't settled yet

• Income evidence and details of existing debts

• A clear idea of what's excluded and what you'll fund yourself

Speak to a real person

Book a free appointment at a time convenient to you — face to face in our Church Street office in Dubbo, over the phone, or by video call. No obligation, and no cost to you. Call 02 6885 0588 or book online.

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