Construction Loans.
At Valley Finance, we know building your own home or starting a major renovation is one of life’s biggest (and most exciting) projects. But we also know the finance side can feel… less exciting. That’s where we step in.
A construction loan works differently from a standard home loan — funds are released in stages as your build progresses, so you only pay interest on the money that’s been drawn down. We’ll guide you through every step, making sure the structure of your loan matches the structure of your build.
How Construction Loans Work.
When you take out a construction loan, your lender will release the funds in agreed stages, known as “progress payments.” These usually line up with key milestones in your build, such as:
Slab down – the foundation is poured.
Frame up – the skeleton of your home is built.
Lock-up – walls, roof, windows, and doors are in place.
Fixing stage – interiors like kitchens, bathrooms, and fittings are installed.
Completion – your home is ready for you to move in.
At each stage, you’ll only pay interest on the amount released — helping you manage your budget while the build is underway.
Why choose Valley Finance?
We’re not a big franchise, we’re a local family-run business who genuinely cares. Based on the NSW South Coast, we know the local property market, and we understand the needs of home buyers and builders in our community.
We're here to answer your questions (big or small), explain things in clear simple terms, and make sure you feel confident at every stage.
Frequently Asked Questions.
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A construction loan is a short-term loan designed to fund the building or major renovation of a property. Instead of receiving the full amount upfront, the funds are released in stages (called “progress payments”) as the build reaches certain milestones — like laying the slab, putting up the frame, and final completion.
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Progress payments mean you only pay interest on the portion of the loan that’s been drawn down. For example, if your slab is complete and the bank has released 20% of the total loan amount, you’ll only be paying interest on that 20% until the next stage of construction. This can help ease cash flow during the build.
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A standard home loan gives you the entire loan amount in one lump sum. A construction loan is structured to release funds gradually as the work is completed, which helps ensure the builder gets paid and the project stays on track. Once construction is complete, the loan is usually converted into a standard principal and interest home loan.
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Typically, lenders will ask for:
Council-approved building plans
A signed fixed-price building contract from a licensed builder
Proof of income and expenses
Evidence of deposit or equity
If you’re self-employed, you may need additional financial statements — but don’t worry, we can guide you through what’s needed.
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Most construction loans have a set period (often 12–24 months) to finish the build. If you need more time, it may be possible to negotiate an extension with your lender.
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Yes — if the renovation is substantial (for example, adding new rooms, changing the layout, or significant structural work), a construction loan may be suitable. For smaller cosmetic updates, like painting or replacing flooring, a personal loan or refinancing may be a better option.
