You’ve found the land, and you can already picture it: more space, a bigger backyard, or a spare room for guests. The dream home feels close. Now comes the practical part: working out how to fund the build!
The good news is there is more than one way to make it happen. You can use one loan for both the land and construction or use separate loans for each. The right path depends on your plans, timing and financial situation, so it’s a smart move to speak with a mortgage broker early.
Here’s a quick look at how each option works, so you can choose the right next step.
Combined land and construction loans
A combined land and construction loan covers – as you probably guessed – both the land and the build of your new home under one loan. That means one application, less paperwork and a straightforward path from purchase to build.
This option usually works best when your land, builder, and council approvals are all ready to go.
One of the benefits of a Bluestone Construction Home Loan is that you can pay interest only on the land and construction costs for the first two years while the build is underway. In some cases, this may be extended up to five years before repayments move to principal and interest. It’s designed to give you more breathing room while your home comes to life.
Separate land and construction loans
Separate loans can give you more flexibility with timing. The trade-off is that you will need to apply for two loans: one for the land and one for construction.
It can also be helpful if you want to secure the land first, then take more time to choose a builder and finalise your plans.
Something to keep in mind if you’re taking the two-loan route: holding costs, changes to your income or expenses, and interest rate movements can all affect your borrowing capacity, which may influence the size or timing of your build. Be sure to talk to your broker or financial adviser first.
Bluestone’s Construction Home Loan can help fund the land and build under one loan, or fund construction on land you already own. Whichever path you are considering, talking to your broker is a great next step to understand what’s possible.