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 uses a construction loan, which is different from a standard mortgage. Funds are released in stages as building milestones are met, known as a progressive drawdown. You typically make interest-only payments during this period.
It's vital to have a contingency fund of at least 15% of the build cost to cover potential overruns. Always have a lawyer review the building contract and be financially prepared for potential delays and the cost of two mortgages.
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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