How does finance work when building a new home

Financing a new build involves a construction loan, which differs from a standard mortgage. Funds are released in stages via a progressive drawdown to pay contractors, with interest-only payments common during the build.

It's vital to have a contingency fund of at least 15% for potential cost overruns and to have a lawyer review your building contract. Be prepared for project delays, which can impact finances. Choosing a reputable, experienced builder is also critical for a successful outcome.