- Home
- >
- Home Loans
- >
- Construction & Renovation Loans
Construction & Renovation Loans in Australia
Building a new home or undertaking a major renovation is an exciting step – but it also introduces more complexity than a standard property purchase. From progress payments to valuations and cash-flow timing, the way your loan is structured can make or break a project.
At Palisade Brokers, we help Australians secure construction and renovation loans that are designed around their build timeline, budget, and long-term plans. Whether you’re constructing a new home, completing a knock-down rebuild, or renovating your existing property, we manage the finance side so you can focus on the build itself.
Because we’re broker-led, we compare lenders experienced in construction lending. That means clearer expectations, fewer surprises, and a funding structure that supports your project from start to finish.
What Is a Construction & Renovation Loan?
A construction or renovation loan is a mortgage designed to fund a property build or major renovation, with funds released progressively as work is completed.
These loans typically involve:
- Progressive drawdowns tied to build stages
- Interest charged only on funds drawn
- Valuations at key milestones
Because construction lending works differently to standard home loans, choosing the right lender and structure upfront is critical.
What These Loans Are Commonly Used For
- New home builds
- Knock-down rebuilds
- Duplex or townhouse projects (small scale)
- Major structural renovations
- Extensions and significant upgrades
How Construction & Renovation Loans Work
Unlike a standard home loan, construction and renovation loans are funded in stages rather than as a lump sum.
Common features include:
- Progress payments released at each build stage
- Interest calculated only on the amount drawn
- Valuations before stage releases
- Flexible structures depending on lender policy
The cheapest option on paper is rarely the best. Reliability, timing, and structure matter more in construction finance.
Who These Loans Are Best Suited For
Construction and renovation loans are ideal for:
- Owner-occupiers building a new home
- Homeowners renovating or extending
- Families completing knock-down rebuilds
- Small-scale developers
- Borrowers using equity to fund works
If your project or income structure is more complex, we can explore specialist or alternative options to keep the build moving.
Small-scale developers may also explore our Development Loans options where projects extend beyond a single dwelling.
Key Benefits of a Construction & Renovation Loan
- Interest charged only on funds drawn
- Loan structure aligned to build stages
- Flexibility to fund large projects
- Ability to use equity instead of cash
- Access to lenders experienced in construction
Common Challenges (And How We Solve Them)
Cash-flow gaps during the build → We structure loans to align with progress payments.
Valuation shortfalls at stages → We select lenders with realistic construction policies.
Cost overruns or scope changes → We plan buffers and review funding early.
Complex builder documentation → We manage lender requirements upfront to avoid delays.
Our Process at Palisade Brokers
- Initial Strategy Call
Understand your project, budget, and timeline. - Structure & Feasibility Assessment
Review build costs, equity, and funding options. - Lender Selection & Application
Choose lenders experienced in construction lending. - Progressive Funding & Completion Support
Ongoing support through each build stage.
Related Loan Options You May Want to Explore
Frequently Asked Questions
-
Funds are released in stages as the build progresses, following lender valuations.
Speak with a Construction Loan Specialist
