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Construction Finance That Keeps Your Build Moving

Expertly structured construction loans to support every stage — from slab to settlement.

Speak to a Construction Loan Specialist

Introduction – Construction Finance

Construction finance is very different from a standard home loan — and treating it like one is where many builds run into trouble. A construction loan isn’t just about getting approved; it’s about ensuring funds are released on time, interest is structured correctly, and your build progresses without unnecessary delays or cash-flow stress.

At Grange Finance, we specialise in construction finance solutions for owner-builders, knock-down rebuilds, and residential developments. We understand how lenders assess building contracts, how progress payments work, and where projects commonly stall. Our role is to structure your construction loan, so your build stays on track from day one to final handover.

Who This Service Is For

This service is ideal for clients building a new home, undertaking a knock-down rebuild, or completing a major renovation that requires staged funding.

If you’re building your first home, we help you understand how construction loans differ from standard mortgages, what documentation lenders require, and how repayments work during the build.

For existing homeowners, this service supports knock-down rebuilds or construction projects where equity from your current property is being used as part of the funding strategy.

We also work with investors and developers who need construction finance structured correctly to manage cash flow, interest exposure and future borrowing capacity.

Types of Construction Loans

Construction loans are typically tailored to how and what you’re building. Common options include:

  • Owner-Occupied Construction Loans
    Designed for homes you intend to live in once construction is complete.
  • Investment Construction Loans
    Structured for rental properties, with different lending criteria and tax considerations.
  • Knock-Down Rebuild Loans
    Finance that covers demolition, construction and transition from old dwelling to new.
  • Owner-Builder Loans
    More complex lending for clients managing their own build without a fixed-price builder.
  • Renovation Construction Loans
    For major structural renovations that require staged funding rather than a lump sum.

Each loan type has different approval requirements, risk assessments and lender policies — and choosing the right one matters.

One-Part vs Two-Part Construction Finance

One-Part Construction Loan

  • Single loan that automatically converts from a construction loan to a home loan
  • Interest-only payments during the build, calculated on drawn funds
  • Simpler structure with fewer documents and less admin
  • Limited flexibility to make changes once construction is complete
  • Best suited for straightforward, standard build projects

Two-Part Construction Loan

  • Separate construction loan that is refinanced into a home loan after completion
  • Interest-only during construction, then restructured once the build is finished
  • More complex process with additional paperwork
  • Greater flexibility to review or change loan options post-construction
  • Ideal for investors or builds with more complex financial needs

We help you choose the structure that suits your build, budget and long-term plans — not just what’s easiest to approve.

Progress Payments & Drawdown Stages

Construction loans release funds in stages, known as progress payments, as your build moves forward.

Typical drawdown stages include:

  • Slab / Base stage
  • Frame stage
  • Lock-up stage
  • Fixing stage
  • Completion / Handover

Key things to understand:

  • You only pay interest on the funds drawn so far
  • Valuations may be required at each stage
  • Delays in paperwork can delay payments to your builder
  • Correct documentation upfront avoids costly build delays

We coordinate with lenders, builders and valuers to ensure payments are released smoothly and on time.

Interest, Rates & Loan Structure

During construction, most loans operate on an interest-only basis, calculated only on the amount drawn — not the full loan limit. This helps manage cash flow while the build is underway.

Once construction is complete, the loan typically converts to a standard home loan, where you can choose:

  • Variable rates for flexibility
  • Fixed rates for certainty
  • Split loans for balance
  • Offset accounts to reduce interest

Key considerations we help with:

  • Managing rate risk during long builds
  • Structuring repayments post-construction
  • Avoiding unnecessary interest exposure
  • Ensuring the loan suits your long-term financial goals

This is where experience matters — small structuring decisions during construction can have long-term impacts.

Why Choose Us for Construction Loans

✔ Construction Loan Specialists

We understand builder contracts, progress payments and lender requirements.

✔ Access to 50+ Construction Lenders

We source options beyond retail banks, including specialist construction lenders.

✔ End-to-End Support

From pre-approval to final drawdown, we manage the process with you.

✔ Proactive Problem Solving

We anticipate issues before they cause delays or cost overruns.

FAQs

  • 1. How is a construction loan different from a normal home loan?

    Funds are released in stages, and interest is charged only on drawn amounts during construction.

  • 2. Do I need a fixed-price building contract?

    Most lenders prefer fixed-price contracts, especially for standard builds.

  • 3. Can I live elsewhere while building?

    Yes — we help factor rent or existing mortgage commitments into servicing calculations.

  • 4. What happens if construction costs increase?

    Cost overruns can be challenging — proper buffers and structure upfront are critical.

  • 5. Can I refinance after construction is complete?

    Yes — many clients review their loan once the build is finished to optimise rates and features.