Buying guide
How does finance work when building a new home
Finance when building a new home can be complex - here’s everything you need to know.
AI summary
Financing a new home involves a construction loan, which differs from a standard mortgage. You borrow in stages via a 'progressive drawdown' to pay builders as work is completed, often making interest-only repayments during the build.
It's vital to budget for a contingency fund of at least 15% to cover potential cost overruns. Have a lawyer review your building contract and be financially prepared for potential delays, as you may be paying two mortgages simultaneously.
How do construction loans work?
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Finance for new builds works a little differently than your average home loan.
Managing costs during a new build
Choosing your builder
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