How does a construction loan work in Australia?

A construction loan is a short-term facility structured around your build contract's progress payment schedule. Rather than receiving the full loan amount upfront, funds are drawn down in stages as construction milestones are certified — typically slab, frame, lock-up, fixing, and practical completion. Interest is charged only on the amount drawn at each stage, not the full facility.

What LVR can I borrow for a construction loan?

Most lenders will lend up to 80% of the combined land and construction value without lender's mortgage insurance (LMI). With LMI, some lenders will go to 90%. Owner-builder situations are typically capped at 60–70% depending on the lender and your licence status.

Do I need a fixed-price contract for a construction loan?

Most lenders — and all lenders requiring LMI — require a fixed-price building contract from a licensed builder. Some non-bank lenders will consider cost-plus or construction management contracts, but this narrows the lender panel and typically increases the rate.

Can I get a construction loan as an owner-builder in Canberra?

Yes, but the lender pool is smaller. Major banks and most non-bank lenders don't write owner-builder loans. Specialist lenders who understand the owner-builder licence structure in the ACT are available, and we know which ones to approach and how to position the application.

Black Mountain Financial

Development Finance

Construction, land, residual stock, and mezzanine. ACT and regional NSW.

Explore →02

Commercial Property

Purchase, refinance, and equity release across office, industrial, retail and mixed-use.

Explore →03

Business Finance

Acquisition funding, working capital, equipment and trade finance for operators.

Explore →04

Construction Loans

Staged construction facilities for residential, mixed-use and commercial builds.

Explore →05

SMSF Lending

Commercial and residential property within self-managed superannuation, kept compliant.

Explore →

By locationCommercial Finance Canberra Development Finance Canberra Business Finance Canberra Construction Loans NSW

Home→Services→Construction Loans

Built to spec.
Structured for the build.

Construction loans in Canberra and the ACT need a lender who understands build contracts, progress draws, and how local projects actually run. We structure facilities that match your actual build — not a standard product forced onto a non-standard situation.

Max LVR (land + build)

Up to 90%

Loan term

12 – 24 months

Progress draws

5 certified stages

Region

ACT · Regional NSW

Begin a conversation

What we do

You pay interest on the drawn balance. Nothing more.

A construction loan is not a mortgage with extra steps. Funds release in stages as the build progresses, and interest is charged only on what's drawn — not the full facility. That changes how the loan is structured and who should write it.

We structure the drawdown schedule around your build contract, manage the lender through construction, and plan the transition to a permanent loan at practical completion. Construction lending needs active management from application to handover — not just settlement.

Understand your build

Land ownership, builder selection, contract status, timeline. Construction lending needs different information from a standard mortgage. We map it early.

Structure the facility

Facility size, drawdown schedule, and interest-only period built around your contract and progress payments — designed to match your build.

Match the lender

Owner-occupier, spec investor, owner-builder, or commercial — not every lender suits every build. We go to the ones whose criteria fit.

Coordinate progress draws

Each stage needs certification. We keep payments moving so your builder isn't left waiting on paperwork.

What we finance

Construction loan types we structure.

Residential and commercial construction. Deal sizes range from standard owner-occupier builds through to larger spec and commercial projects.

—

Residential construction — new builds, knockdown-rebuilds, and large-scale renovations.

—

Spec builds — investor-owned construction on titled land, no owner-occupier requirement.

—

Dual occupancy and dual key builds.

—

Owner-builder construction — specialist lenders for licensed owner-builders.

—

Commercial construction — office, retail, industrial, and mixed-use builds.

—

Small residential developments that don't need full development finance.

What we optimise

The parameters that shape your facility.

The metrics that determine your borrowing capacity and how the facility is structured.

Up to 90%

LVR on Land + Construction

For owner-occupier builds with LMI; typically 80% without.

12–24 Months

Loan Term

Construction period, then converts to a permanent loan.

Interest-Only

Interest During Build

Charged only on the drawn balance — not the full facility.

5 Stages

Progress Draws

Payments released against certified build milestones.

Fixed-Price

Contract Type

Most lenders require a fixed-price contract for LMI purposes.

Licensed

Builder Requirement

Registered builder required; owner-builder options available via specialists.

How we work

From first call to practical completion.

Construction loan applications are document-intensive. We do the heavy lifting — assembling the valuation package, council approvals, and managing lender queries through assessment.

We won't push a build that doesn't stack. If the numbers are marginal or the contract isn't ready, we'll tell you — and tell you what to fix before any lender sees it.

Understand your build

Land ownership, builder, contract status, and timeline mapped out early.

Structure the facility

Facility size, drawdown schedule, and interest-only period matched to your contract.

Select the right lender

We identify lenders whose criteria fit — standard build, spec, owner-builder, or commercial.

Manage the application

Valuation package, council approvals, and lender queries — handled end to end.

Coordinate progress draws

Each stage drawdown needs certification. We keep the process moving so your builder isn't stalled.

Plan the transition

At completion the loan converts to a mortgage or investment loan. We review, refinance if better, and lock in the right long-term product.

What to expect

Progress drawdowns, certified in five stages.

Construction funds release in five certified stages. Your lender engages a valuer to inspect and certify each milestone before releasing the next draw. We coordinate this so payments reach your builder on time.

Slab down (base stage)

Frame complete

Lock-up (external walls and roof)

Fixing stage (internal fit-out)

Practical completion

Lender options

50+ lenders. The right one for your build.

The construction market splits into three broad tiers. The right lender depends on your build type, contract structure, owner-builder status, and whether you need LMI. We know which lenders will write your deal — and which won't.

Major banks

Lowest rates. Require full council approval and a fixed-price contract before drawdown.

Non-bank lenders

More flexible on contract type, owner-builder situations, and loan structure.

Private credit

Short-term construction bridges for time-sensitive situations or non-standard builds.

Before you apply

What you need in place.

Most construction loan applications fail because the documentation isn't ready at the time of application. We help you prepare before we approach any lender.

—

Fixed-price building contract from a licensed builder (most lenders require this).

—

Council-approved plans and building permits.

—

Land titled, or titling imminently, for construction to proceed.

—

Adequate equity in land — typically 20–30% combined LVR including construction cost.

—

Builder's all-risk insurance and public liability cover.

—

For owner-builders: a valid owner-builder permit — specialist lenders cap at 60–70% LVR.