construction loan Wollongong

A construction loan is drawn in stages rather than as a lump sum, and you only pay interest on the amount drawn to date. Payments go directly to your builder as each stage completes.

The standard stages

• Deposit or base stage

• Slab or foundation

• Frame

• Lockup, when external walls, windows and doors are in

• Fixing, covering internal fitout

• Practical completion

What the lender needs at each draw

The builder's invoice, evidence the stage is complete, and in many cases an inspection or progress valuation.

After the final draw

The loan converts to a standard principal and interest home loan.

Delays in stage payments are one of the biggest friction points in a build, so we make sure the draw process is clear to both you and your builder before construction starts. See our full guide to construction loans in Wollongong.

You need a fixed price building contract with a licensed builder, council approved plans and your standard income documentation. The full requirement:

• A fixed price building contract signed by both parties

• Council approved plans and specifications, or a complying development certificate

• Development consent or construction certificate from Wollongong City Council

• The builder's licence details, home warranty insurance and public liability cover

• Evidence of your deposit and contributions

• Standard income and liability documentation

How the property is valued

On an as if complete basis, meaning the valuer assesses what the finished home will be worth against the plans and contract.

Cost plus and owner builder

Treated far more cautiously, and many lenders will not fund them at all. If that is your intended approach, tell us early because it narrows the lender panel considerably. Our construction loans guide covers deposit requirements, and if you are building your first home see first home loans.

Variations are not automatically covered by the loan. You either fund the extra cost yourself or apply for a loan increase, which requires a fresh assessment and possibly a new valuation.

Time overruns

Construction loans have a defined build period, commonly around twelve months. If the build runs past it you may need to seek an extension. Interest continues to accrue on the drawn balance throughout, so delays cost money even where no extra work is done.

If the builder fails mid project

The position becomes complex and depends on home warranty insurance and the stage reached.

Two pieces of practical advice

Hold a genuine contingency of your own outside the loan, and resist making variations once the contract is signed. We build the contingency assumption into your borrowing plan rather than approving you to your absolute limit. If repayments become difficult mid build, talk to us early, and see struggling with mortgage payments.

Yes to both, though sloping blocks bring a specific valuation risk you need to plan for.

Knockdown rebuild

The lender values the land and proposed dwelling together, and demolition costs need to be included in your funding position. An existing mortgage on the property is usually restructured into the construction facility.

Sloping and escarpment blocks

Common through Wollongong's western suburbs and the northern villages. Excavation, retaining, piered footings and access can add substantially to build cost, but the valuer assesses the finished property against comparable sales, which may not fully reflect what you spent on site works. That gap can create a valuation shortfall you cover in cash, so knowing your available equity upfront matters.

Bushfire and landslip mapping

Land mapped in these areas may require additional reports and construction standards, affecting both cost and lender appetite.

If you are building more than one dwelling on the block, see dual occupancy loans or development finance.