Construction Loan Brokers in Brisbane
A construction home loan is a completely different product to a standard home loan, and getting the structure right from the beginning can save you significant stress, time, and money throughout your build.
At Woodrow Finance, our construction finance broker team in Brisbane specialises in land and construction loans, new builds, knockdown-rebuilds, and major renovations. We work with a panel of 50+ lenders to find the right product for your project, and we’ll guide you through the mechanics of construction finance so you always know what’s happening and why.
We compare across 50+ lenders to get you the best rates
How Construction Loans Work: The Key Differences
Understanding how a construction home loan differs from a standard mortgage is essential before you commit to a build. Here are the fundamentals.
Progressive Drawdown (Not a Lump Sum)
With a standard home loan, the full loan amount is paid to the seller at settlement. With a land and construction loan, funds are released in stages, called drawdowns, as your build progresses through each phase.
You only draw what you need at each stage, so you pay interest only on the amount drawn down, not the full loan amount.
This is sometimes called a "progress payment" structure, and it's what makes construction home loans more complex than a standard mortgage.
Interest-Only During the Build
While your home is under construction, your loan repayments are typically interest-only on the drawn-down amount. Once the build is complete and the final drawdown has occurred, the loan converts to principal and interest (P&I) repayments, the same as a standard home loan.
"As If Complete" Valuation
Before approving a construction home loan, lenders assess the value of your property as if the build were already finished. This is called an "as if complete" valuation, and it's based on the proposed plans, specifications, and comparable sales in the area. This valuation determines how much the lender is willing to lend against the completed property.
Build Window
Most construction loans come with a 12-month build window, meaning the construction must be completed within 12 months of the first drawdown. If your build runs over time, extensions may be available, but should be discussed with your lender and our construction loan brokers early.
The 5-Stage Drawdown Schedule
Construction loans follow a standard five-stage drawdown schedule, aligned with key milestones in the build. Here’s how it works.
|
Stage |
Milestone |
Typical % of Loan |
|
1 |
Base / Slab |
15% |
|
2 |
Frame |
20% |
|
3 |
Lockup |
25% |
|
4 |
Fixing / Fit-out |
20% |
|
5 |
Completion |
15% |
|
Deposit (paid upfront to builder) |
5% (typical) |
At each stage, your builder will submit a progress claim. We coordinate with your lender to ensure the drawdown is processed promptly, keeping your build on schedule. Some lenders require an inspection at each stage before releasing funds.
Your construction loan broker at Woodrow Finance will keep you updated on all of this.
Build Scenarios We Cover
Our Brisbane construction finance broker team works across a wide range of build scenarios. Here’s what we can help with.
New Build on Owned Land
If you already own your land and are ready to build, we can structure a standalone construction loan. Drawdowns begin once your building contract is signed, and council approvals are in place.
Land and Construction (Single Contract)
The most common setup for first-time builders is to purchase land and build in a single transaction. Some lenders offer a single loan that covers both, which simplifies the process. Others require two separate facilities. We’ll find the structure that works best for your situation.
Knockdown and Rebuild
Buying an existing property to demolish and build new is a popular strategy in established Brisbane suburbs where land is scarce. The loan structure accounts for the existing property value, demolition costs, and the construction contract.
Major Renovation
Significant renovations can sometimes be financed through a construction facility rather than a standard loan.
Owner-Builder
Building your own home without a registered builder is possible, but it’s worth flagging that the lender pool for owner-builder loans is considerably smaller. Many lenders won’t touch owner-builder scenarios at all. If this applies to you, speak to our team early.
Queensland Construction Finance: Grants That Apply to Builds
If you're building in Queensland, the current grant and concession landscape is particularly favourable, and the timing is important.
First Home Owner Grant: $30,000 on New Builds (Until 30 June 2026)
The Queensland First Home Owner Grant (FHOG) currently pays $30,000 for eligible first home buyers who sign contracts for a new build before 30 June 2026, on properties valued under $750,000. After that date, the grant reverts to $15,000.
This is one of the most significant financial incentives available to Queensland builders right now, and it applies only to new construction, not to established homes. If you're considering building and meet the eligibility criteria, the deadline is worth considering.
Stamp Duty Abolished on New Builds and Vacant Land
From 1 May 2025, stamp duty (transfer duty) has been abolished on new builds and vacant land purchases in Queensland. For a land and construction purchase, this is a meaningful saving that stacks on top of the FHOG.
First Home Guarantee: 5% Deposit, No LMI
Eligible first home buyers can also combine construction finance with the federal First Home Guarantee, which allows you to build with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). LMI is the insurance policy protecting the lender, not you, when you borrow more than 80% of a property's value, and it can cost tens of thousands of dollars.
Avoiding it makes a real difference to your overall build cost.
Whether the First Home Guarantee applies to your specific construction scenario is worth confirming with our team, as eligibility and property price caps apply. Our mortgage broker for first home buyers page covers the full picture of first home buyer grants and schemes in detail.
Fixed-Price vs Cost-Plus Contracts: What's the Difference?
Most lenders strongly prefer fixed-price contracts for construction loans. This is because the total cost of the build is confirmed upfront, which makes it easier to assess the loan amount and manage risk throughout the build.
A cost-plus contract is one in which the builder charges for their costs plus an agreed margin. The final price isn't locked in, which creates uncertainty for lenders and for you. Most mainstream lenders won't approve a land and construction loan against a cost-plus contract, though some specialist lenders will. If you're working with a cost-plus builder, talk to our construction loan brokers before you sign.
What Happens with Cost Overruns?
Even with a fixed-price contract, cost overruns can occur, usually due to variations you request, site conditions, or material price movements.
Your construction home loan typically can't be increased once approved, so overruns need to be funded from savings or other facilities. Building in a contingency buffer is sensible financial planning.
What If My Builder Becomes Insolvent?
Builder insolvency is a risk in the current construction environment.
Most lenders and state governments require builders to hold Home Warranty Insurance (or Domestic Building Insurance in QLD) for contracts over a certain value. This provides some protection if your builder can't complete the work. We recommend checking your builder's insurance, licence, and financial standing before signing any contract.
When Do Interest Rates Lock In on a Construction Loan?
On a construction loan, your interest rate typically isn’t locked in until each drawdown occurs. This means your rate during the build may differ slightly from the rate quoted at approval, depending on market movements.
Some lenders offer a rate lock feature for a fee. Whether this is worth it depends on the rate environment and your build timeline. Our construction finance broker team will work through this with you.
Our Broader Finance Services
Once your build is complete, many clients use their new property as a springboard for the next move. Our refinance home loan broker team can review your loan structure post-build.
We also work with property investors through our home loan for investment property service, provide mortgage brokerage for self-employed clients, support medical mortgage broker scenarios for healthcare professionals, structure SMSF home loan lending, and assist with asset finance broker needs. We’re your Brisbane mortgage broker across the board.
Book a Land and Construction Loan Strategy Call
Construction finance is one of the more complex areas of home lending, but it can be easier with our construction finance brokers in Brisbane.
Book your construction home loan strategy call today. Call (07) 2111 1294 or submit your details below.
(07) 2111 1294Grant eligibility is subject to individual circumstances. Please refer to the Queensland Revenue Office for FHOG and stamp duty eligibility. This content is educational in nature and does not constitute financial advice. Woodrow Finance operates under ASIC regulations and MFAA Best Interests Duty requirements.
Our Team
Get to know the qualified brokers and finance specialists behind Woodrow Finance. We help everyday Australians understand their lending options and feel confident about the home loan and finance journey.
Daniel
Founder & Mortgage Broker
Founder of Woodrow Finance, delivering tailored advice with transparency and fast, personalised service.
Baxter
Mortgage Broker
Seven-plus years' experience, specialising in self-employed and investment lending plus first-home and construction loans.
Nathaniel
Finance Specialist
Qualified Finance Specialist helping first-home buyers, investors and refinancers find tailored finance solutions.
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FAQs
Can I use the First Home Guarantee with a construction home loan?
Yes, in many cases, but eligibility and lender participation vary. The property price cap and loan structure need to align with scheme requirements. Our Brisbane construction finance team will confirm what applies to your specific scenario.
What documentation do I need for a land and construction loan?
You’ll typically need your building contract, council-approved plans, builder’s licence details, a fixed-price tender or contract, and your standard financial documents. We’ll prepare a full checklist for you.
Can I make changes to the build after the loan is approved?
Yes, but variations to the contract that increase the total build cost may require lender approval and could affect your loan amount.
Do construction home loans cost more than standard home loans?
During the build, you only pay interest on drawn funds, so your repayments are lower than they would be with a fully drawn loan. Once construction is complete and the loan converts to P&I, repayments align more closely with a standard home loan. Rates on construction loans can vary by lender and scenario.