Construction Loans in North Brisbane
Building a home in North Brisbane requires a different type of finance to purchasing an established property. Construction loans are drawn down in stages as building progresses, with interest charged only on the amount drawn. Home Loan Broker North Brisbane connects you with brokers who specialise in construction lending and understand the requirements of building in Queensland.
How Construction Loans Work
Unlike a standard home loan where the full amount is paid at settlement, construction loans release funds in progress payments (also called drawdowns) aligned with building milestones:
- Slab or base stage — Typically 10% to 15% of the contract value
- Frame stage — Around 15% to 20%, once the frame is erected
- Lock-up stage — Approximately 20% to 25%, when external walls, windows, and roof are complete
- Fit-out or fixing stage — Around 20% to 25%, for internal linings, cabinetry, and fixtures
- Completion stage — Final 5% to 15%, upon practical completion and handover
During construction, you typically pay interest-only on the amount drawn, keeping repayments lower until the build is finished. Once complete, the loan converts to a standard principal and interest (or interest-only) home loan.
Types of Construction Finance
Fixed Price Building Contract
The most straightforward construction loan involves a fixed price contract with a QBCC-licensed builder. Lenders prefer this arrangement because the total cost is known upfront. Your broker ensures the lender’s progress payment schedule aligns with your builder’s contract.
House and Land Packages
Purchasing land and a building contract together is common in North Brisbane growth areas like Bracken Ridge and surrounding suburbs. Your broker can structure finance to cover the land purchase and construction as a single facility or separate loans, depending on what suits your situation.
Owner-Builder Finance
If you hold a QBCC owner-builder permit, finance is available but with stricter lending criteria. Most lenders limit owner-builder loans to 60% to 70% LVR and require detailed cost breakdowns, council-approved plans, and sometimes a quantity surveyor report. Fewer lenders offer owner-builder products, making broker access to multiple lenders particularly valuable.
Knockdown Rebuild
Demolishing an existing home and rebuilding on the same site is increasingly popular in established North Brisbane suburbs. This involves funding the demolition, construction, and potentially temporary accommodation. Your broker structures the finance to cover each phase.
QBCC Licensing — Why It Matters
The Queensland Building and Construction Commission (QBCC) licenses and regulates builders in Queensland. Your lender will require your builder to hold a current QBCC licence. This provides:
- Home warranty insurance protection
- Regulatory oversight of building standards
- Dispute resolution pathways if issues arise
Always verify your builder’s QBCC licence before signing a contract. Your broker can confirm the lender’s specific requirements.
Industry Bodies and Standards
Reputable North Brisbane builders are often members of industry associations:
- Housing Industry Association (HIA) — National industry body representing residential builders
- Master Builders Queensland — State industry association with member standards and dispute support
- QBCC registered — All builders must hold appropriate QBCC licensing
These memberships provide additional consumer protection and indicate professional standards.
North Brisbane Growth Areas for Building
North Brisbane has seen significant new construction activity in:
- Bracken Ridge — Established suburb with infill development opportunities
- Aspley — Character homes being replaced with modern builds
- Fitzgibbon — Newer development area with house and land packages
- Carseldine — Transformation around the former QUT campus site
- Bridgeman Downs — Acreage subdivisions and new home construction
Lenders for Construction Loans
Not all lenders handle construction lending equally. Some have streamlined progress payment processes while others are slower. Our brokers compare construction loan products from CBA, Westpac, NAB, ANZ, Suncorp, BOQ, Bankwest, Macquarie Bank, and specialist construction lenders.
Frequently Asked Questions
How much deposit do I need for a construction loan?
Most lenders require a minimum 10% deposit based on the total end value (land plus construction cost). With government schemes, first home buyers may access 5% deposit options.
Can I make changes during construction?
Variations during construction are common but must be documented and approved by both the builder and lender. Significant variations may require additional approval from your lender before funds are released.
What if my builder goes over the fixed price?
A fixed price contract means the builder absorbs cost overruns. However, any variations you request will be additional. Lenders typically include a contingency buffer of 5% to 10% in their assessment.
How long does construction loan approval take?
Construction loans generally take longer to approve than standard home loans — typically two to four weeks. The lender needs to assess the building contract, plans, and builder credentials in addition to standard lending criteria.
Can I inspect the build during construction?
Yes, and you should. Independent building inspections at each progress payment stage are recommended. Your broker can advise on the process for authorising progress payments.
Connect with a Construction Loan Specialist
Whether you are building your first home, constructing an investment property, or doing a knockdown rebuild, connect with a broker who understands construction lending in North Brisbane. Free introduction, no obligation.
Home Loan Broker North Brisbane is a broker introduction service. We connect you with qualified mortgage brokers holding Australian Credit Licences. Construction lending involves specific risks including building delays and cost variations. All credit products are subject to lender terms, conditions, and eligibility criteria.
