Construction Loans for Building in Gladstone

Building Your Dream Home in Gladstone

Building a new home is an exciting journey, but the finance side can feel complex. Construction loans work differently from standard home loans - multiple drawdowns, progress payments, builder coordination, and valuations.

We specialise in construction finance and can guide you through every step, from land purchase to handing over the keys to your brand new home.

How Construction Loans Work

Unlike a standard home loan where you receive the full amount upfront, construction loans are drawn down in stages as your build progresses. You only pay interest on the amount drawn, which keeps costs manageable during construction.

Typical Construction Stages

Stage 1: Deposit/Base (10-15%) Paid when the slab is poured or base stage complete.

Stage 2: Frame (15-20%) Paid when the frame (structural skeleton) is erected.

Stage 3: Lock-up (20-25%) Paid when the roof is on, windows and doors installed, and the building is “weather-tight.”

Stage 4: Fixing/Fit-out (25-30%) Paid when internal works are complete - plastering, cabinetry, tiling, etc.

Stage 5: Practical Completion (10-15%) Final payment when the build is complete and ready to move in.

Note: Exact percentages vary by builder contract.

Interest During Construction

During the build, you only pay interest on the funds drawn down. Here’s an example:

Stage	Cumulative Drawn	Interest Payment
Start	$0	$0
Base	$75,000	~$375/month
Frame	$150,000	~$750/month
Lock-up	$275,000	~$1,375/month
Fixing	$425,000	~$2,125/month
Completion	$500,000	~$2,500/month

Based on 6% interest rate. Actual amounts vary.

After completion, your loan converts to a standard home loan with full principal and interest repayments.

Land and Build Packages

Buying a land and build package? We can finance both components:

Option 1: Separate Land and Construction Loans

• Purchase land first with a land loan
• Construction loan draws down when building begins
• May offer more flexibility in choosing builder/design

Option 2: Combined Package Loan

• Single loan covers land purchase and construction
• Simpler structure with one application
• Land component settled, then construction drawdowns begin

Both approaches have merit. We’ll help you choose based on your specific package and timeline.

First Home Owner Grant for New Builds

Building new? Don’t miss the First Home Owner Grant:

• $30,000 for new homes in regional Queensland (including Gladstone)
• Paid at the base stage of construction (after slab)
• Can be used toward your construction costs

Combined with stamp duty concessions on the land component, first home buyers can save significantly when building new.

Owner-Builder Finance

Planning to manage your own build as an owner-builder? This is possible but more complex:

Lender requirements typically include:

• Building experience or qualifications
• Council-approved plans
• Fixed-price contracts with licensed trades
• Detailed cost breakdowns
• Contingency allowance (usually 10-20%)
• Higher deposit requirements

Fewer lenders offer owner-builder finance, but we work with those who do and can guide you through the requirements.

What Happens If Costs Increase?

Construction variations are common - you might decide to upgrade finishes, discover unexpected site conditions, or face material cost increases.

Managing variations:

1. Builder provides written variation with cost
2. You approve the variation
3. We apply to the lender for additional funds (if needed)
4. Lender may require updated valuation
5. Additional funds approved and added to drawdown schedule

It’s wise to build a contingency buffer into your original finance (typically 5-10% of build cost) to cover minor variations without needing to reapply.

The Construction Finance Process

Here’s what to expect when financing a new build:

Pre-Approval (Week 1-2) We assess your borrowing capacity and provide pre-approval for land purchase and construction.

Land Settlement (Weeks 3-6) If buying land separately, we settle the land purchase.

Construction Approval (Before Building Starts) We submit your building contract, plans, and specifications. The lender orders a valuation of the “as-if complete” value.

During Construction (4-12 Months) Your builder submits invoices at each stage. We coordinate payment approval with the lender.

Completion Final inspection, last payment, and your construction loan converts to a standard home loan.

Ready to Build?

Whether you’re looking at a land and build package, buying land to build later, or managing your own owner-builder project, we’re here to help. Book a consultation to discuss your building plans and finance options.