New Build Construction Loan Calculator
Forecast your construction loan's interest-only payments stage by stage, from land to completed build.
Building Your Dream Home? Run the Numbers
Financing a new build is very different from buying an existing house. Instead of handing over all the money at once, banks release your loan in stages as the house is built. This calculator provides a helpful starting guide to estimate your cash flow and interest costs during the build process.
It is 100% free to view your estimates with no mandatory sign-ups, logins, or hidden data capture.
1. How Contrcution Drawdowns Work
- Progress Payments: When you build, the bank pays your builder in stages (e.g., when the foundation goes down, when the roof goes on). This protects both you and the bank from paying for work that hasn't been completed.
- Interest-Only While You Build: The great news for your cash flow is that during the construction phase, you typically only make interest-only payments, and only on the money that has been drawn down so far. You don't pay the full mortgage amount until the house is finished.
2. Turnkey vs. Build Contracts
- Turnkey: You pay a deposit (usually 10%) upfront, and the developer funds the rest of the build. You only draw down your mortgage when the house is 100% complete and the keys are handed over.
- Construction/Progressive Build: You buy the land first, and then take out a construction loan to pay the builder in stages. Banks will almost always require a Fixed-Price Build Contract to approve this.
Next Step: Getting Your Build Approved
Construction finance involves complex bank criteria, including "as-if-complete" registered valuations and mandatory cost overruns (contingencies). Send your numbers to a Home Loan Factory adviser, and we will guide you through the specific bank requirements to get your build properly funded—completely free of charge.
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