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Construction Loans Perth
House and land packages, new builds and knockdown rebuilds. Construction lending is more involved than a standard purchase. Understanding the structure, cash timing and lender requirements before you sign a building contract can help you avoid avoidable surprises.
Why more Perth buyers and investors are looking at building
New construction can be worth checking carefully for first home buyers, owner-occupiers and investors. The $10,000 First Home Owner Grant applies only to newly built homes, stamp duty concessions may assist eligible first home buyers, and Perth still has a functioning builder market with house and land packages across the northern and southern corridors.
The finance is more complex than a standard purchase. Land settlement, construction progress payments, grant timing, lender policy and cash buffer all need to line up. We work with buyers before the building contract is signed through to practical completion, helping them understand the likely funding structure and the documents lenders usually require.
Construction calculator
Use the drawdown calculator before you sign
Before you commit to a building contract, use our construction loan drawdown calculator to estimate the land settlement amount, staged bank drawdowns, FHOG timing, possible out-of-pocket contributions, construction interest and repayments after completion.
The calculator is a guide only. It does not confirm approval, borrowing capacity or whether a construction loan is suitable for your circumstances.
Open the calculatorConstruction lending at a glance
| How funds are released | Progressive drawdowns at each build stage, not a lump sum |
| Interest during build | Charged only on funds drawn, not the full loan amount |
| Typical draw stages | Slab, frame, lockup, fixing, practical completion |
| FHOG timing | Paid at first progress draw, not at land settlement |
| Deposit (owner-occupier) | Varies by lender, loan size, LVR, LMI position and borrower circumstances |
| Deposit (investor) | Typically higher than an owner-occupier loan and subject to lender assessment |
| Rate during build | Variable interest-only, converts to P&I at completion |
House and land packages: coordinating the finance from the start
Perth has a higher proportion of house and land packages than most Australian capital cities. New estates across Alkimos, Brabham, Baldivis, Ellenbrook and the broader northern and southern corridors, knockdown rebuilds in established suburbs, and dual occupancy builds for investors who want two dwellings on one title are all active parts of the market right now.
A house and land package involves two separate contracts. The land settles like a standard property purchase, and your deposit needs to be available at that point. The construction then proceeds on a separate building contract, funded progressively as each stage is completed and inspected. The First Home Owner Grant does not arrive at land settlement. It comes in at the first construction draw, which is the slab stage. A buyer who has not been told this can find themselves short on cash at land settlement when they expected the grant to be available.
We work alongside Perth's house and land builders, coordinating the land and construction components as a single plan so buyers are not caught out by the sequencing. The right broker for a house and land package is one who has done it before, knows which lenders accept which builder contracts, and can manage the draw requests without the client having to chase progress at every stage.
What we can help with
- House and land package finance, coordinating land settlement and construction drawdowns as a single plan
- New home construction loans for owner-occupiers building their first home or next home
- Knockdown and rebuild finance for existing property owners
- Investment construction loan scenarios for investors comparing new build funding options
- Duplex and dual occupancy finance for investors building two dwellings on one title
- First Home Owner Grant coordination and access to stamp duty concessions for eligible buyers
- Builder and contract assessment before lender submission
- Equity release from an existing property to fund a new build
For investors: New build investment lending can involve different valuation, cash flow, rental and completion risks compared with an established property purchase. If you are weighing a new build against an established purchase, speak to your accountant about tax treatment and speak to us about how lenders generally assess the finance structure.
Frequently asked questions
How does a construction loan work in Perth?
A construction loan releases funds in stages as the build progresses, not as a lump sum at settlement. You draw down at each milestone: slab, frame, lockup, fixing, and practical completion. You pay interest only on what has been drawn during the build, which keeps holding costs lower than a standard loan while construction is underway. At practical completion the loan converts to a standard principal and interest home loan.
Can I use a construction loan for a house and land package?
Yes. A house and land package involves two separate contracts. The land settles like a standard purchase and your deposit is needed at that point. The build is funded via a construction loan with progressive drawdowns. Your First Home Owner Grant is paid at the first construction draw, not at land settlement. A broker coordinates both components so the sequencing and cash flow work as a single plan from the start.
What deposit do I need for a construction loan in Perth?
Most lenders require a minimum 5 to 10 percent deposit for a residential construction loan, calculated on the total completed value of the land and build combined. Some lenders will go to 95 percent LVR with lenders mortgage insurance. For investors, most lenders require 10 to 20 percent. The exact requirement depends on the lender, loan size, and whether you are an owner-occupier or investor.
Does negative gearing apply to new builds in 2026?
Federal budget proposals introduced in 2025-26 are designed to limit negative gearing treatment to newly constructed properties for new investors entering the market. Existing investors with established properties are not affected by the proposed changes. For investors weighing their next acquisition, the shift toward new builds has become more strategically significant. Speak to your accountant about how this applies to your situation and timing.
Can I use equity from an existing property to fund a new build?
Yes. If you own a property with sufficient equity, you can use it as additional security to support a construction loan, which may reduce or eliminate the cash deposit required. This is a common structure for investors and owner-occupiers who are building rather than purchasing. We look at your current security position as part of structuring the construction finance.
What does a broker actually do on a construction loan?
A construction loan involves more moving parts than a standard purchase. The broker assesses which lenders will accept the builder, the contract type, and the site. They coordinate the sequencing for house and land packages so the land settlement and construction drawdowns are properly timed. They submit the application with the full construction documentation, manage progress inspections and draw requests, and stay across the build until practical completion. The difference between a broker who does this regularly and one who does not shows up at the first draw request.