Home loans in Floreat
Construction Loans Floreat
Construction loans in Floreat work differently from an ordinary home loan, and Your Mortgage Broker Floreat arranges them across Perth's western suburbs with the drawdown mechanics, costs and timelines published up front rather than discovered gradually mid build.
Your Builder Wants a Progress Payment. Where Does It Come From?
A builder cannot wait until settlement to be paid. Work is funded stage by stage, each with its own rules, inspections and costs, and Floreat's pipeline shows how common this is: the suburb recorded 280 dwelling approvals over the last five years. First home buyers should note that first home buyer loans and the Western Australian first home owner grant both interact with construction finance, and the full lending range sits on our home page.
Construction Loans We Arrange
Construction lending bends around six project shapes, and lenders treat each differently, so the variant your file is tells Your Mortgage Broker Floreat which credit policies apply; deeper renovation comparisons live on our home renovation loans page:
Standard Construction Loans
A standard construction loan funds a build on land you already own, releasing money to your builder in stages as each milestone finishes, with interest charged only on the portion actually drawn at any point throughout the whole build program.
House and Land
House and land packages combine a land settlement and a building contract into one application, although most lenders still write them as two facilities, and we structure the timing so the land loan converts cleanly when the build itself starts.
Knockdown Rebuild Finance
Knockdown rebuild finance pays for demolishing an existing house and building fresh on the same block, and it needs a lender comfortable with security that temporarily has no dwelling on it, which rules out more mainstream policies than people expect.
Vacant Land, Later Build
Vacant land followed by a later build suits buyers who want to secure a Floreat or western suburbs block now and design in their own time, and the right structure keeps the construction conversion simple instead of a fresh application.
Owner Builder Projects
Owner builder loans are the hardest variant in this space, because lenders want a licensed registered builder carrying the contract risk, so the few that accept owner builders ask for project plans, cost estimates and a margin reduction on borrowing.
Approved Major Renovations
Major renovations needing formal council approval can run on a construction style facility with staged draws against builder invoices, which costs far less than a personal loan or credit cards, and we compare both routes before you commit to either.
The Drawdown Schedule Nobody Else Publishes
Lenders never hand over a construction loan in one lump. Funds release in five stages, each verified by an inspection or a signed declaration, and the percentages below are typical of the market rather than universal, because every lender writes its own schedule. The stages add back to the full contract price, and your builder's payment claims should map onto them line for line, so a claim jumping ahead is the first thing we would query:
| Stage | What it covers | Typical release |
|---|---|---|
| Slab down | Site works, footings and the slab pour | 10% |
| Frame | Wall and roof framing, verified by inspection | 15% |
| Lock-up | External walls, windows and roof, building locked | 35% |
| Fit-out | Internal fixtures, joinery, plumbing and electrical | 30% |
| Completion | Practical completion, final inspection and handover | 10% |
What the Build Actually Costs You Each Month
The true cost of a construction loan shows up in monthly cash flow, not the headline. Interest accrues only on funds drawn, but rent or an existing mortgage keeps running, and most households carry both for a year or more. As a worked illustration with stated assumptions: on a $700,000 loan assessed interest only at an assumed five per cent, the fully drawn bill is roughly $2,917 a month, but at lock-up with about half the funds released, monthly interest sits nearer $1,458. Four pressures decide whether your numbers hold:
Interest on Drawn Funds
During construction lenders switch your repayments to interest only on the funds drawn, so a nine hundred thousand dollar loan released in five stages costs a fraction of a full repayment in month one, and the monthly bill climbs steadily.
Rent Plus Interest
Rent or an existing mortgage keeps running while your construction loan accumulates interest, so budget for both payments at once across a twelve to eighteen month build, because that overlap is the expense borrowers underestimate before signing the building contract.
The Contingency Buffer
Contingency money covering a tenth of the contract price absorbs cost variations, site surprises and material price movements, and lenders increasingly ask where that money sits, so we help you document it before assessment rather than scrambling after a query.
Extended Timeline Costs
Extended build timelines carry costs beyond interest, including rent running longer, fixed price contracts expiring, and builder margin pressure flowing into variations, and a realistic program written before application protects you from financing a delay that a tighter schedule prevents.
How it works
Our Construction Loans Process
Timelines stretch when files wait on builders, surveyors and councils as much as on lenders, so every stage below carries the timeline we work to, and you are welcome to hold us to each one:
- 1
Strategy Call, Week One
Strategy calls happen within days of your enquiry, covering the build program, the contract type and your borrowing position, and you leave the call knowing which lenders accept your builder, your contract structure and your deposit before application paperwork begins.
- 2
Approval in Principle
Approval in principle on a construction file takes two to three weeks, longer than an ordinary application because the lender assesses the builder, your contract and plans as well as you, and we manage every condition through to sign off.
- 3
Documents and Valuation
Collecting documents and booking initial valuation run in parallel over one to two weeks, with plans, specifications, the fixed price contract and your builder's insurance going to the lender together, because piecemeal submissions are what stretch construction assessments into months.
- 4
Progress Payment Rounds
Each progress payment request goes from your builder to the lender, triggers an inspection or a statutory declaration depending on policy, and takes five to ten business days to approve and pay, so we monitor the entire drawdown queue actively.
- 5
Completion and Final Value
Final inspection and the completion draw close the file, usually within two weeks of practical completion, and this is where the lender confirms the finished value supports the loan, which is why we discussed valuation risk back at strategy stage.
Where Construction Loans Fall Over
Every failure mode below has cost real borrowers real money, usually avoidable with a conversation held before the building contract was signed, and each carries a specific early warning sign worth recognising:
Contract Variations
Fixed price contracts attract variations, and every variation changes the cost the lender approved because unreported changes can breach conditions mid build, which is why we tell clients to send us each variation before the builder starts the extra work.
Completion Valuation Shortfalls
Valuations on completion sometimes come in below build cost, particularly after cost escalations, and a shortfall can leave the final draw short or force you to fund the gap from savings, so we stress test the numbers against your contract.
Builder Panel Problems
Some builders are not acceptable to every lender, because panels check registration, insurance history and completed projects, and a builder failing one lender's checklist sails through another's, so we verify your builder against several policies before you sign anything binding.
Approval Expiry Risks
Builds running past the loan term create a problem, because approval expiry forces reassessment, and your changed circumstances or tighter policy can sink a project already half built, so we set realistic expiry dates and diarise extensions before they lapse.
Why Choose Your Mortgage Broker Floreat
Trust cannot rest on reputation a new brand has not built yet, so the four commitments below are all verifiable today, on public registers or in a written document from us:
A Named Accountable Broker
Your file sits with a named broker whose qualifications and licence details are published on our about page, one accountable person from first call to final draw, not a rotating queue of staff meeting your build for the first time.
Genuine Panel Lending
Panel lending means your contract gets shopped across multiple lenders with different construction policies, rather than judged by one bank's checklist, and because lenders enter and leave panels, we describe current fit honestly instead of quoting a number that ages.
No Cost, Disclosed
Most borrowers pay us nothing, because the lender pays commission on settlement, and where any fee would apply we disclose the amount in writing before you proceed, so advice cost never becomes the reason an important build question goes unasked.
Process Before Product
Process comes before product, meaning we map the drawdown schedule, the variation rules and the expiry dates in writing before recommending a lender, because a construction loan chosen on headline figures is the one most likely to hurt borrowers later.
Where we work
Areas We Service
Building and renovation clients come to Your Mortgage Broker Floreat from across Perth's west, including Wembley Downs, Churchlands, Wembley, Jolimont and Shenton Park, and each suburb page carries its own local figures.
Ask Us to Map Your Floreat Drawdown Schedule Before You Sign Anything
Bring your contract, your block details and your build timeline, and Your Mortgage Broker Floreat will map the drawdown stages, the carrying costs and the lender policies that fit your file, before you sign anything. Call (08) 6311 4000 today.
Questions answered
Frequently Asked Questions
How do progress payments actually work?
Your lender releases funds in five stages, slab, frame, lock-up, fit-out and completion, each verified by an inspection or statutory declaration and paid directly to your builder, usually within five to ten business days of the request.
What does a construction loan cost me during the build?
During the build you pay interest only on funds already drawn, so a $700,000 loan sitting half drawn carries roughly half the fully drawn interest bill each month, alongside your rent or existing mortgage, and that overlap is what budgets miss.
Do I pay rent and the construction loan at the same time?
Yes, your rent or current mortgage keeps running throughout the build while construction interest accumulates, so we model both payments together before application and confirm the combined total is genuinely serviceable across the full build program.
Can I use the First Home Owner Grant with a construction loan?
Yes, the Western Australian first home owner grant applies to many builds and is paid at milestones rather than settlement, so we check grant eligibility, duty concessions and lender requirements together before the application is structured.
What happens if my build goes over budget or over time?
Variations change the approved cost and approval expiry forces reassessment, so we set a contingency buffer, diarise extension requests before dates lapse, and ask you to send us every variation before the builder starts the extra work.
What does it cost to use Your Mortgage Broker Floreat?
For most borrowers, nothing, because the lender pays commission on settlement, and if any fee would ever apply to your file we disclose the exact amount in writing before you decide whether to proceed.
Mortgage broker for Floreat and the suburbs around it