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Construction Loans for Your Melbourne's West Build

Build your dream home with confidence.
Planning to build your home from the ground up is an exciting journey but it comes with unique financial requirements. Construction loans are different from standard home loans, and having the right guidance is essential.Building a home or investment property is exciting, but the finance behind it works nothing like a standard mortgage. A construction loan releases funds in stages as the build progresses, and you typically pay interest only on what’s been drawn, which keeps costs manageable while the work is underway. Eagle Home Loans compares construction lending across more than 60 lenders, guiding builders and buyers across Melbourne’s West through a process that can feel complex, so your funding keeps pace with your build and the money is there exactly when each stage needs it.

Construction loan helping build new homes and finance land and house packages in Australia

How We Help You

We make construction financing simple and structured

Building a home involves multiple stages, approvals, and payments. We simplify the process and ensure your loan is set up correctly from the start.

We help you:

  • Understand how construction loans and progress payments work
  • Secure finance for land purchase and building costs
  • Explore options for house & land packages or off-the-plan purchases
  • Structure your loan to suit each stage of construction
  • Guide you through approvals, contracts, and lender requirements

Are You Eligible for a Construction Loan?

Most lenders will assess a construction loan application based on:

  • A stable income sufficient to service repayments during and after construction
  • A fixed-price building contract with a licensed builder
  • A deposit of at least 5-20%, depending on the lender and whether it's a house-and-land package
  • Land ownership or simultaneous land purchase as part of the loan
  • Council-approved plans and permits before funds are drawn down

What a Construction Loan Costs

Beyond your deposit, construction loan borrowers should budget for:

  • Progress payment inspection fees, charged at each construction milestone
  • Lenders Mortgage Insurance (LMI), if your deposit is under 20%
  • Council and building permit fees, separate from the loan itself
  • Interest-only repayments during construction, based on funds drawn so far
  • Potential cost overruns it's wise to budget a contingency buffer above the fixed contract price

Construction Financing in Practice

Consider a buyer building a $500,000 home on land they already own. Their construction loan releases funds in stages slab, frame, lock-up, fit-out, and completion so they only pay interest on the portion drawn at each stage, rather than the full loan amount from day one.

Coordinating Your Build Across 60+ Lenders

Rather than accepting a generic construction loan structure, we compare options across a panel of more than 60 lenders to find progress payment terms and interest structures that align with your builder’s schedule and your overall budget.

Your Journey Made Simple

A simple process from start to finish

Plan the Build and the Budget

We start with your build: the land, the fixed-price building contract, and the full cost including any extras beyond the contract. Construction lending is assessed on the finished value and the contract itself, so getting these details right upfront prevents shortfalls partway through.

Structure the Staged Funding

Construction loans release money in progress payments tied to build stages, so we structure the loan so funds are available as each stage completes. We make sure the drawdown schedule aligns with your builder's payment stages, so neither you nor your builder is left waiting.

Arrange Approval and Get Building

We compare construction products across the lender panel, weighing how each handles progress payments, valuations and interest-only periods, then manage the application and the documents lenders require for a build. Once approved, you're clear to start, with the funding framework in place.

Manage Drawdowns to Completion

As each stage finishes, we help coordinate the progress payments so your builder is paid on time and the build keeps moving. When construction is complete, we confirm the loan converts to its ongoing structure and walk you through your repayments from that point.

FAQ'S

Common Questions About Building Your Home

How does a construction loan work?

A construction loan releases funds in stages rather than as a single lump sum, with each progress payment paid to your builder as a stage of the build is completed, such as the slab, frame, lock-up and completion. You generally pay interest only on the amount drawn so far, which keeps repayments lower during the build, and the loan typically converts to a standard principal-and-interest mortgage once construction finishes. This staged approach protects both you and the lender by tying funding to actual progress. We’ll explain each stage and make sure your loan’s drawdown schedule matches your building contract.

Deposit requirements for construction are broadly similar to buying an established home, often around 20% to avoid lenders mortgage insurance, though some lenders accept less with LMI added. What differs is that lenders assess the loan against the total cost of the land plus construction and the expected value of the finished property, not just a purchase price. If you already own the land, its equity can often count toward your deposit, which can significantly reduce the cash you need. We’ll work out how your land, savings and the build costs combine to determine your deposit.

Cost overruns are one of the most common challenges in building, which is why lenders assess your loan against a fixed-price building contract and encourage a contingency buffer from the start. If costs rise beyond the approved loan, you’ll generally need to fund the difference yourself or apply to increase the loan, which requires reassessment and isn’t guaranteed. The best protection is planning realistically upfront and keeping a buffer for variations and extras not in the contract. We help you account for the full cost, including items outside the building contract, so you’re far less likely to be caught short mid-build.

Yes, but usually only interest on the funds that have been drawn so far, which keeps your repayments lower in the early stages when little has been released and rising as more of the loan is drawn. This interest-only arrangement typically lasts through the build, then the loan converts to principal-and-interest once construction is complete and full repayments begin. It’s worth planning for the jump to full repayments at completion, especially if you’re also paying rent while you build. We’ll show you how repayments change across the build and at completion so there are no surprises.

Yes, construction lending covers major renovations and knockdown-rebuilds as well as new builds, though the structure depends on the scope and cost of the work. Substantial projects with a fixed-price contract are usually funded through a staged construction loan much like a new build, while smaller renovations may suit a simpler top-up or equity release. The right approach depends on the size of the project and whether you’re staying in the home during the work. We’ll assess your plans and recommend the structure that fits, whether that’s a full construction facility or a more straightforward release of funds.

Beyond the usual income and identification documents, construction lenders require your signed fixed-price building contract, council-approved plans, and often builder details and insurance, because the loan is assessed on the project as much as on you. Lenders use these to value the finished property and to confirm the build is properly costed and approved before releasing any funds. Missing or incomplete documentation is one of the most common causes of delay in construction finance. We’ll give you a clear checklist upfront and review everything before submission, so your build starts on schedule rather than stalling on paperwork.

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