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Building loans and construction finance with the right foundations

Land and construction loans

Whether you’re looking to knock down an existing property, complete a major renovation or have a fresh start with a new home on a piece of vacant land, a land and construction loan might be the answer to what you need.   

Loan Gallery is proud to work with Australia’s largest home builder, Metricon as their preferred partner for construction finance. Our team are experts in finding the best construction loans in Melbourne and across the country for new home building projects. 

Understanding building and construction finance

A standard home loan is suitable for most existing property sales, but isn’t always effective when building and construction is involved. Instead, a construction loan is a better alternative when building a new property. Building loans require you to have a fixed price building contract in place with a registered builder.

With a construction loan you can receive progress payments to access money as the relevant building stages are completed.

Progress payments are usually set up on an interest only basis. Then at the project’s completion you can switch to principal or interest if you prefer. This means you only need to make necessary payments as the project progresses. While at the same time helping you manage cash flow throughout the build.

How does a construction loan work?

Here at Loan Gallery, our team has helped thousands of clients purchase their new home off the plan. Our expertise means we can support you every step of the way to get your loan approved.

We take the time to get to know you and tailor a lending solution so you can best achieve your goal of building your dream home at a great rate. We’ll be there in your corner guiding you through the process every step of the way. Including having your long term financial goals in mind at the completion of the project.

Stages of the build

There are usually five main stages for a construction loan with progress payments made to your builder at the completion of each stage.


Laying the foundation


Frame and roofing


Lock up and brickwork - secure the structure


Plastering, cabinetry and fixing


Completion including internal painting
Speak to broker today
We can help you find the best loan for your circumstances so you can build your dream home.

What happens to your construction loan when the construction is complete?

Once your house is built your lender will arrange a property inspection to confirm the property is finished as per the original specifications. During the construction period, your loan repayments would be interest only. Once your lender has confirmed the property is complete, your repayments on the construction loan will become principal and interest repayments.

Why you should choose Loan Gallery

We put your needs first

We get to know you, and identify your goal. While being flexible and responsive during the process.

Experts in construction

As the preferred partner in Victoria of Metricon, we’ve helped over 13,400 residents secure their house and land packages.

Over 70 lender options

Our strong existing relationships with our lenders helps us negotiate the right deal for you.

High ethical standards

We take compliance seriously and are committed to exceeding your expectations.

After hours support and flexibility

We will guide and risk assess your options. With quick response times and after hours support you’ll always be informed.

Best in the business

For 8 years we’ve been rated the Top performing brokerage in VIC/TAS by AFG.

Benefits of a construction loan

Structured repayments

A building or construction loan has interest only payments during the construction period. This means you’ll have lower repayment amounts while the build is in progress.

You can also have the option to make additional payments at any time. Allowing you to pay less interest and reduce the loan balance.

Manage cash flow

Taking on a new build or a major renovation is a big project. A builder will normally break down the job into a number of stages. With a construction loan you have the ability to draw down the loan at the various stages by making progress payments. 

These payments are spread throughout the construction period allowing you to better manage your cash flow during this time.

5 things to consider when building a new home

1. Your need for speed

Buying off the plan maximises your time as it gives you at least 12 months, sometimes longer, to settle. Savvy buyers use this time to save their money and reduce the total borrowing amount. Keeping their loan manageable when they move in.

2. A new home, hassle free

Buying off the plan means you can select a design you love as you will usually have the flexibility to customise some finishes and fixtures. Be sure to double check your contract to avoid any additional costs or nasty surprises if you opt for changes to finishes.

3. First home buyer incentives

Buying off the plan usually entitles first home buyers to various incentives to help them get onto the property ladder. You could be eligible for the First Home Loan Deposit Scheme: New Home Guarantee grant dedicated to construction builds and the $10K First Home Owners grant or the Family Home Guarantee.

For the most up-to-date information, see your local state or territory website for details about grants and exemptions. You can also research your eligibility for stamp duty concessions on new properties at

4. Incentives for Investors

Off the plan apartments are often targeted towards investors because of the many tax benefits on offer, including depreciation on new properties and rental guarantees. It’s important to remember that tax savings vary depending on individual circumstances but generally speaking, the newer the property, the higher the depreciation allowance for the building and fixtures.

Investors may also be offered attractive rental guarantees for a limited period. Always do your homework on rental returns on similar properties in the area before accepting a developer’s terms and be wary of over-inflated rental guarantees. If you’re an investor, make sure you have the option to manage the property yourself or with your preferred property manager from the time the property is yours.

5. Choose the developer wisely

Always opt for reputable builders and do your homework on their previous projects. You want to research and know that they use quality contractors and deliver projects on time. Visit a few of their projects in person to see the finished product before you agree to purchase off the plan.

Calculate your borrowing power for your construction loan

Want to know more about construction finance?

7 Things to consider when building a new home
Consider these 7 things before you sign on the dotted line for your dream home to be built.
How to set up a budget
Saving for your dream home can be difficult. Our financial planner explains how you can simply set up a budget so you can get started on your new build as soon as possible.
Why not start today?

Why wait? Speak to a Loan Gallery construction loan specialist to get started.
Speak with our specialist and enquire more about our other loan services, including personal loan consolidation, home improvement loans, refinance mortgage and buying investment property in Melbourne.

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