Building a home or investment property in Queensland is an exciting project — but construction loans work very differently from a standard mortgage. Progress draws, fixed price contracts and land purchase finance all need to be managed carefully. Blambles gets the structure right so your build doesn't hit financial speed bumps.
A construction loan is a specialist home loan designed for people who are building a new property rather than purchasing an existing one. Instead of releasing the full loan amount at settlement (as with a standard home loan), a construction loan releases funds in stages — called "progress draws" or "progress payments" — aligned with the stages of the building process. This means you only pay interest on what has been drawn down at any point, rather than the full loan amount from day one.
The typical progress draw stages for a house build in Queensland are: slab (foundation), frame, lock-up, fixing (internal fit-out) and practical completion. At each stage, a lender inspection confirms the work has been completed before the next draw is released. The builder invoices at each stage, and the funds are released directly to the builder. Blambles coordinates this process and manages the lender's inspection schedule to keep everything on track.
One of the key requirements for a construction loan is a fixed price building contract — a signed contract between you and the builder specifying exactly what is being built and at what price. Lenders need this to assess the end value of the completed property (called the "on completion" valuation) and to ensure the total project cost — land plus construction — is within their LVR limits. If the contract is not fixed price, lenders will often decline or significantly restrict the loan.
Many owner-builders and those building an investment property use a combination of a land loan (for the purchase of the block) and a construction loan (for the build itself), which are often consolidated into a single mortgage upon completion. If you've already purchased the land separately, Blambles can structure the construction finance to work around your existing setup.
It's also worth noting that the First Home Owner Grant in Queensland (currently $30,000) applies specifically to new homes — meaning first home buyers who build rather than buy an established property can access the grant. This makes building an attractive option for first home buyers in Queensland if they can manage the additional complexity of a construction loan.
Funds are released in stages aligned with your build — meaning you only pay interest on what's been drawn, reducing the cost of borrowing during the build period.
During the build, you typically only make interest payments on the amount drawn — keeping your costs down while your house is being built and you may still be paying rent.
Where you're purchasing land and building, Blambles can structure both components into a single lending arrangement — minimising fees and keeping the process clean.
First home buyers building a new home in Queensland can access the $30,000 FHOG — which is specifically designed for new properties, including those constructed through a building contract.
Once the build is complete and the property is valued, the construction loan converts to a standard home loan — often at a lower rate. Blambles manages this transition smoothly.
Construction loans are available for both homes to live in and investment properties — with different lender policies and assessment criteria applying to each. Blambles knows both well.
We review your land purchase (or existing land) and your building contract to establish the total project cost, expected on-completion valuation and your deposit position.
Not all lenders are equally good at construction finance. Blambles identifies lenders with efficient progress draw processes, competitive rates and a good track record with construction loans.
The lender orders an "on completion" valuation — assessing the property's expected value once the build is finished. Approval is based on this valuation and your serviceability assessment.
As each build stage is completed, we coordinate with the lender to release the next draw to your builder — ensuring funds flow smoothly and your builder can keep working without delays.
Once the build is complete, the final draw is released, the property is inspected and the construction loan converts to your ongoing home loan — often at a lower P&I rate.
Construction finance is one area where using the right broker really does make a material difference to your experience. Some lenders have notoriously slow progress draw processes — which means your builder waits for payment, which creates tension and potential delays in your build. Blambles knows which lenders handle construction draws efficiently and which are a source of ongoing frustration.
The on-completion valuation is also critical — if the lender's valuer comes in lower than expected, your LVR may breach the lender's limit and cause complications. Blambles helps you manage this risk proactively, including choosing lenders whose valuation panels are appropriate for your build location.
Access to 40+ lenders means you're not limited to your bank's construction product — which is often not the most competitive. And managing the draw process on your behalf is something Blambles does as part of the service, at no cost to you.
Yes — most lenders require a fixed-price building contract signed by you and a registered builder before they will approve a construction loan. The contract tells the lender the full cost of construction, which they use alongside the land value to calculate the total project cost and the on-completion valuation. Cost-plus contracts or owner-builder arrangements are much harder to finance through mainstream lenders.
An on-completion valuation is the lender's independent assessment of what the property will be worth once the build is finished — not what you're spending to build it. Lenders use this to ensure the completed property is worth at least as much as the total loan, and to calculate the final LVR. If the market in your area has softened or if the valuer is conservative, the on-completion figure can sometimes come in lower than expected — which can affect your loan limit.
Yes — and it's often advantageous. Building a new home gives you access to the Queensland First Home Owner Grant ($30,000), which is only available for new builds. You can also access the federal First Home Guarantee for builds, subject to property price caps and eligibility requirements. The complexity of a construction loan is higher than a standard purchase, but Blambles manages the process for you so you can focus on your build.
If your build cost increases beyond the fixed contract price, you may need to fund the difference from your own resources — lenders only approve up to the original contracted amount. Builder delays extend the construction period, which means you pay interest on drawn amounts for longer. This is why choosing a reputable builder with a solid track record matters — and why your construction contract should include progress payment provisions that protect both parties.
Most lenders require a minimum 5–20% of the total project cost (land + construction) as a deposit — depending on the LVR policy and whether LMI applies. For construction of an investment property, most lenders require a minimum 10–20% deposit. The total project cost is calculated as the land purchase price plus the building contract amount.
Free consultation, no obligation. Tell us about your land, your builder and your timeline — Blambles will structure the right construction finance for your build.