Construction Loans

Are you dreaming of that special home? Have you been drawing plans and pacing out room sizes?  Do you want a modest townhouse or a lavish mansion? 

If you are thinking of building a new home, whether you are buying a Land and Home Package or designing your own house, talk to us about finance.

Building a new home has become an attractive option in recent times as construction loans do not fall under the banks high LVR restrictions, meaning  you may be able to borrow more than 80% of the cost of the project.  For advice on how this may help you, talk to Financing Futures.

You may be able to get a First Home Grant of up to $10,000 each when you build a new home?  You need to have been saving regularly into a KiwiSaver scheme for at least three years, be building your first home and meet income cap criteria to qualify for a grant.  


Financing the construction of a new home is less daunting when you understand what is expected.

Step 1: The Finance Process


It is always good to know what budget you are working to. By talking to us early, we can help determine how much you might be able to borrow to put your plans into action.  We will help you through the hurdles of applying for your loan and will find the best finance package for you. 

Once you know your budget you can explore designs and layouts.  Plans can be drawn up and quotes obtained.  A copy of the purchase agreement for the land and a building contract for the proposed work will be required to get a formal approval of finance.

The bank will order a registered valuation based on the building contract to confirm how much the home will be worth once the work is completed.  This valuation helps to determine how much you can borrow from them.

You need to have taken into account unexpected costs and have an allowance for overruns when deciding how much finance you require.

Step 2: Construction

House under construction

Financing Futures aims to put you in the best position to turn your dreams into a reality. By talking to us early on in the planning stage, we can develop the right loan structure from day one to allow you to move forward with peace of mind.

Once finance is in place, you are ready to start building.  Construction loans are drawn down in stages as agreed in your building contract.  Your own funds are usually expected to be paid to the builders before the bank draws down any loan funds. The progress payments are made directly to the builders at each stage of the construction.

Contract Works or Builders Risk Insurance needs to be in place before building begins.

Construction loans are usually on a floating interest rate and may be on an interest only structure.  This helps keep repayments low if you are renting or paying an existing home loan.

Step 3 - Handover

At handover, the bank must inspect the property again to ensure it is completed to their requirements before they will draw down the funds for the final payment.  They will ask for a certificate of compliance from the builder.

Home Insurance must be in place as the builders risk cover will cease at handover.

Once it is all finished you will have your new home.  You will have dealt with overruns, the weather and endless decisions. 

Let Financing Futures be the best decision you made.  Let Financing Futures set you on the right path to your new home!