Construction loans for Torquay, Geelong and the Surf Coast
Construction Loans to Help Bring Your New Home to Life
Building a home involves more than arranging an ordinary home loan. OCEAN Lending can help you understand construction finance, compare suitable lenders and guide you through approval, valuation, settlement and progress payments.
Understanding Construction Finance
A Different Loan for a Different Type of Purchase
An ordinary home loan generally provides the approved funds at settlement. A construction loan usually releases the building funds progressively as nominated stages of the build are completed.
The lender may assess the land, building contract, plans, specifications, permits, builder and estimated completed value before approving the facility.
OCEAN Lending can review the complete project, explain the likely lender requirements and help structure the land and construction lending around your circumstances.
Construction Finance Solutions
What Are You Planning to Build?
The most appropriate lending structure can depend on the property, contracts, builder, project size and whether you already own the land.
Building a New Home
Finance for constructing a new owner-occupied home on land you already own or are purchasing.
House and Land Packages
Assistance coordinating separate land and building contracts, deposit requirements, settlement timing and construction funding.
Knock-Down and Rebuild
Construction lending for demolishing an existing home and building a replacement property on the same land.
Investment Property Construction
Finance for constructing an eligible investment property, subject to expected rental income and lender assessment.
Major Extensions
Construction-style finance for significant structural additions, second storeys and major extensions requiring progressive payments.
Owner-Builder Projects
Assistance exploring specialist finance where you intend to coordinate or undertake the construction rather than using a standard fixed-price building contract.
Progressive Funding
How Construction Loan Progress Payments Work
Once the construction facility is ready, the lender generally releases funds to the builder as agreed stages are completed. The precise stage names and payment amounts are set out in the building contract.
Deposit
The initial builder deposit may be paid from your own funds or dealt with according to the approved loan structure.
Base or Slab
Payment may be requested after site preparation, foundations and the concrete slab are completed.
Frame
The builder submits an invoice when the structural frame has reached the nominated contract stage.
Lock-Up
This generally occurs once external walls, roofing, windows and external doors are substantially complete.
Fixing
Internal fixtures, plastering, cabinetry, doors and other nominated works are completed.
Completion
The lender may require a final inspection, occupancy documentation and confirmation that the build is complete before releasing the final payment.
Loan Structure
How the Land and Build May Be Financed
The appropriate structure depends on whether you already own the land, have an existing loan or are purchasing the land and building package together.
Construction Loan Against Existing Land
The available equity in the land may contribute towards the construction deposit, subject to valuation, borrowing capacity and lender approval.
Land Loan Followed by Construction
The land may settle first, with the building component becoming available once the required construction documents and approvals are in place.
Construction Top-Up
Where the land is already financed, the existing lender may be able to add a construction facility, or the land loan may need to be refinanced.
Savings and Borrowed Funds
Some projects use a combination of personal savings, land equity and construction finance. The lender may require your contribution to be used before its funds are released.
Preparing Your Application
What Information May the Lender Require?
Requirements differ between lenders and projects. Having complete documents available can help reduce delays during assessment.
Fixed-Price Building Contract
A signed contract showing the total build price, progress stages, inclusions, exclusions and expected timeframe is commonly required.
Plans and Specifications
Detailed plans, specifications, engineering information and a schedule of finishes may be requested.
Building Permits
The lender may require evidence of relevant planning, building or demolition approvals before funds are released.
Builder Information
Registration, insurance, licence details and evidence of the builder’s experience may form part of the assessment.
Property Valuation
The lender may arrange a valuation of the land and an estimate of the property’s value once construction is complete.
Financial Documents
Income, employment, expenses, liabilities, available funds and supporting identification documents will generally be required.
During the Build
Interest and Repayments During Construction
With progressive construction funding, interest is generally calculated on the amount already drawn rather than the entire approved construction facility.
Depending on the lender and loan structure, repayments during construction may be interest-only. Once the build is complete, the loan will generally move to the approved ongoing repayment structure.
It is important to plan for existing rent, land-loan repayments, temporary accommodation and any other costs that may apply while construction is underway.
Owner-Builder Finance
Planning to Manage or Complete the Build Yourself?
Owner-builder construction can involve more lender risk than a project completed by a registered builder under a fixed-price contract. As a result, fewer lenders may be available and additional conditions can apply.
A lender may review your qualifications, experience, detailed costings, project schedule, permits, insurance, subcontractor arrangements and contingency funds. Additional inspections or a quantity-surveyor report may also be required.
Our Process
How the Construction Loan Process Works
We help you understand each stage and coordinate the finance requirements with the lender, builder, conveyancer and other professionals involved.
Initial Conversation
We discuss the proposed build, land position, estimated cost, deposit and preferred timeframe.
Portal Completion
You enter your financial information and securely upload the documents needed for assessment.
Financial Position Meeting
We review your current finances, available funds, building plans, future goals and likely repayment position.
Research and Comparison
We compare suitable construction lenders, policies, rates, fees, loan structures and progress-payment requirements.
Application and Valuation
We lodge the application and help coordinate lender questions, valuation and construction-document requirements.
Settlement and Progress Payments
We support you through settlement and help explain what is required when the builder requests each progress payment.
Plan Beyond the Contract Price
Construction Costs That May Sit Outside the Building Contract
A realistic budget should allow for expenses that may not be included in the advertised house price or initial builder quote.
Site Costs
Soil conditions, excavation, retaining walls, drainage, access and service connections can increase the total cost.
Design Upgrades
Flooring, electrical upgrades, heating, cooling, cabinetry and selected finishes may sit outside the base price.
External Works
Landscaping, fencing, driveways, window furnishings and outdoor structures may need to be funded separately.
Contingency Funds
Maintain funds for unexpected costs, contract variations, delays and expenses that arise during construction.
Local Construction Loan Support
Helping Clients Build Across Torquay, Geelong and the Surf Coast
OCEAN Lending is based in Torquay and assists clients building new homes throughout the Surf Coast, Greater Geelong, the Bellarine Peninsula and surrounding growth areas.
Different estates, land titles, builders and property types can create different finance requirements. We can help review the complete land and construction position before you commit.
Useful Resources
Start Planning Your Construction Finance
These resources can provide useful initial information. Calculator results are estimates and do not represent loan approval.
Borrowing Power Calculator
Obtain an initial estimate before completing a detailed construction lending assessment.
Estimate Borrowing PowerLoan Repayment Calculator
Estimate repayments based on a proposed loan amount, rate and term.
Estimate RepaymentsFree Property Report
Request a complimentary report containing useful property and local area information.
Request a Property ReportRenovation Home Loans
Explore lending options for extensions, renovations, knock-down rebuilds and structural improvements.
Explore Renovation LoansFrequently Asked Questions
Construction Loan Questions
What is a construction loan?
A construction loan is generally a home loan that releases the building funds progressively as agreed stages of construction are completed, rather than providing the entire approved amount at the beginning of the project.
Do I need a fixed-price building contract?
Many lenders prefer or require a signed fixed-price contract from a registered builder. It helps establish the project cost, scope, progress stages and expected completion timeframe.
Do I pay interest on the full construction loan immediately?
Interest is generally calculated on the funds already drawn. As additional progress payments are made, the outstanding balance and interest cost usually increase.
Can I obtain a construction loan if I already own the land?
Potentially. The value of the land and any existing loan may contribute towards the security and deposit position, subject to valuation, borrowing capacity and lender approval.
Can I finance a house and land package?
Yes. The land and building components are often covered by separate contracts and may settle at different times. The loan should be structured around both transactions.
What is an as-if-complete valuation?
It is an estimate of the property’s value after the proposed home has been completed according to the plans, specifications and building contract supplied to the valuer.
What happens if the completed valuation is lower than expected?
A lower valuation may reduce the loan amount available or increase the amount you need to contribute. The options should be reviewed before committing to the project.
Can contract variations be added to the loan?
Additional borrowing may require another credit assessment, supporting documents and potentially a revised valuation. Confirm how variations will be funded before approving them.
Can I use a construction loan for a knock-down rebuild?
Potentially. The lender will generally assess the existing property, demolition arrangements, building contract, proposed completed value and your ability to meet the repayments.
Can I act as an owner-builder?
Some specialist lenders may consider owner-builder projects, but lending options can be more limited and additional deposits, experience, documentation, inspections and contingency funds may be required.
Should I arrange finance before signing a building contract?
It is sensible to understand your borrowing position, available contribution and likely lender requirements before entering an unconditional building contract or paying significant deposits.
Ready to Discuss Your New Home Build?
Book a free, no-obligation conversation with OCEAN Lending. We can discuss your land, building contract, deposit, borrowing position and the construction loan options that may be worth exploring.
The information on this page is general in nature and does not take into account your objectives, financial situation or needs. Building and construction projects involve financial, contractual and building risks. Obtain appropriate legal, conveyancing and building advice before entering a land or building contract. Eligibility, borrowing capacity, lender policies, valuation outcomes, interest rates, fees, progress-payment requirements and loan features vary between lenders and are subject to change. Finance remains subject to lender credit assessment and approval.