Construction loans to build your dream home

Building a new home is one of the most exciting projects you will ever undertake. Finance World specialises in construction lending, arranging loans with progressive drawdowns that align with your build milestones. From foundation to handover, we manage the finance so you can focus on the build.

Apply Now Book Consultation

New home under construction with building framework

How construction finance works

From initial planning through to completion, here is how we structure and manage your build finance.

Pre-Build Planning

We review your building plans, fixed-price contract, council consents, and budget to understand the full scope of your project. This helps us match you with the right lender and loan structure.

Finance Approval

We submit your application to lenders who specialise in construction lending, securing pre-approval so you can move forward with confidence. We negotiate competitive rates and favourable terms.

Progressive Drawdowns

As each construction stage is completed, we coordinate the drawdown process with your builder and lender. A valuer confirms the work, and funds are released to your builder on schedule.

Completion & Conversion

Once your build is complete and the Code Compliance Certificate is issued, your construction loan converts to a standard mortgage. We help you secure the best long-term rate at this stage.

Typical construction drawdown stages

Funds are released progressively as each milestone is completed and verified by a registered valuer.

Stage 1

Foundation & Slab

15%

of total build cost

Stage 2

Framing

25%

of total build cost

Stage 3

Roof & Exterior

25%

of total build cost

Stage 4

Interior Fit-Out

20%

of total build cost

Stage 5

Practical Completion

15%

of total build cost

Why use a broker for construction finance

Construction lending requires specialist knowledge. Here is why Finance World is the right partner for your build.

Construction Lending Specialists

Construction loans are more complex than standard mortgages. We have the experience and lender relationships to structure your build finance correctly from the start, avoiding costly delays.

Interest Only During Build

You only pay interest on the funds drawn down, not the full loan amount. This keeps your costs lower during the construction phase when you may also be paying rent or an existing mortgage.

Drawdown Coordination

We manage the drawdown process between you, your builder, the lender, and the valuer. Each stage is coordinated so your builder gets paid on time and your build stays on track.

Land and Build Packages

Whether you are buying a house-and-land package from a developer or purchasing land separately and engaging your own builder, we structure finance to cover the complete project.

Contingency Planning

Building projects can encounter unexpected costs. We help you plan for contingencies and ensure your loan has sufficient headroom to handle variations without derailing the project.

Post-Build Rate Optimisation

Once your build is complete, we review the market and negotiate the best long-term mortgage rate for you. This is a critical step that many borrowers overlook, and we make sure you do not miss out.

Frequently asked questions about construction loans

Everything you need to know about financing a new build in New Zealand.

How does a construction loan differ from a standard home loan?

Unlike a standard home loan where you receive the full amount at settlement, a construction loan releases funds in stages (called progressive drawdowns) as each phase of the build is completed. You only pay interest on the amount drawn down, not the full loan amount. Once construction is complete, the loan converts to a standard mortgage.

How many drawdowns are there during construction?

Most construction loans have 4 to 6 drawdown stages, typically aligned with key milestones: foundation and slab, framing, roof and exterior, interior fit-out, and practical completion. The exact stages depend on your builder contract and the lender requirements. We help structure the drawdown schedule to match your build timeline.

Do I need to own the land before applying for a construction loan?

Not necessarily. If you are purchasing land and building, we can often arrange a single loan that covers both the land purchase and the construction costs. If you already own the land with equity, that can serve as part of your deposit. We assess both scenarios and recommend the best approach.

What deposit do I need for a construction loan?

Most lenders require a minimum 20% deposit based on the combined cost of land and construction (or the end value of the completed property, whichever is lower). If you own the land outright, the equity in the land counts towards your deposit. First home buyers building a new home may also qualify for reduced deposit schemes.

Can I be an owner-builder?

Some lenders do support owner-builder projects, but the requirements are stricter. You typically need to demonstrate relevant building experience, hold appropriate consents, and provide detailed plans and costings. We know which lenders are more open to owner-builder projects and can guide you through the additional requirements.

Planning a new build

Talk to Finance World about your construction loan before you break ground. We will structure the right finance, manage the drawdowns, and ensure your build stays on track financially.

Apply Now Get in Touch