Build Your Dream Home Without the Financial Stress

Typically 5-20% of the total project cost (land + build). With 20% you avoid LMI. With 10-15% you’ll pay LMI but it’s reasonable. As low as 5% is possible with First Home Guarantee or high equity positions. Example: $250k land + $350k build = $600k total. At 10% deposit you need $60k cash plus costs ($5-10k).

Your builder invoice the bank at set stages (typically 5-7 stages: base, frame, lockup, fixing, practical completion, final). Bank sends inspector to verify work complete. Once approved, bank releases funds directly to builder. You only pay interest on funds drawn so far. We coordinate the entire process—you don’t chase banks or builders.

Construction loans typically have slightly higher rates during the build phase (0.3-0.5% above standard rates), usually 6.8-7.2%. You only pay interest on funds drawn down (not the full loan amount). Once build completes, it automatically converts to standard variable or fixed rate home loan. During construction you typically pay interest-only, then convert to principal & interest after completion.

Most lenders offer rate locks for 6-12 months, perfect for construction timelines. This protects you from rate rises during the build. The locked rate applies once construction completes and converts to standard loan. Some lenders charge a small fee ($300-600) for rate locks beyond 6 months. We recommend locking if rates are rising or you’re on a long build (12+ months).

This is why fixed-price building contracts are essential. They protect you from cost blowouts. If you make variations (upgrades, changes), you’ll need to fund these from savings or apply for loan variation. Most lenders allow 10% variation without re-approval. Going over requires new valuation and serviceability check. We always recommend a $20k-$30k buffer in your budget for unexpected costs or upgrades.

If you’re building on land you don’t live on: No, stay where you are. If knockdown-rebuild: Yes, you’ll need temporary accommodation for 6-12 months. Options: (1) Rent short-term, (2) Stay with family, (3) Rent your own property back from demolition company for a few months. Some lenders offer bridging loans to cover double mortgage costs during this period. We help structure this affordably.

Initial pre-approval: 3-5 business days (like regular loans). Full approval after submitting builder contract and plans: 1-2 weeks including valuation. Total timeline from first application to construction starting: typically 4-6 weeks. If you already own land and have builder ready, it’s faster. If buying land first, add 30-60 days for land settlement before construction begins.

For registered builders: Yes, any HIA/MBA licensed builder is acceptable. Builder must have proper insurance and provide fixed-price contract. For owner-builders: More limited lender options and higher deposits required (usually 20%+). For project homes vs custom: Both acceptable, custom may need more detailed plans. We can recommend reputable Perth builders if needed, though choice is always yours.

This is rare but covered by WA’s Home Indemnity Insurance (mandatory for all licensed builders). If builder goes bust, insurance covers completion costs. You claim on the insurance policy, hire new builder, and they complete the work. Bank holds remaining loan funds to pay new builder. Critical: Only use licensed builders with proper insurance—we verify this before you sign contracts.

During construction: Variable is more common (allows flexibility with progress payments). After completion: You can fix then. Many clients start variable during 6-12 month build, then fix once moved in if rates are favorable. Some lenders allow you to lock a fixed rate in advance (rate applies once building completes). Strategy depends on your rate outlook and how long your build takes. We’ll model both scenarios for your situation.