Construction Finance
Can You Finance Land And Construction Together?
5 min read- Finance Guide
- Updated 2026
Quick answer
One facility can often cover
2 stages
land purchase and construction drawdowns
- Typical structure Single combined facility
- Funding basis Land plus build costs
- Build payments Progress drawdowns
1300 421 044
1300 421 044
Detailed explanation
A combined land and construction loan is designed for borrowers who want one lending structure instead of separate loans for the block and the build. The lender approves a total facility that can cover the land settlement first and the construction costs after that, with progress payments released against completed work and verified stages.
How the combined structure works
The land is settled first, then the build funds are released in stages
- 01Land settlement
- 02Deposit stage
- 03Slab/base stage
- 04Frame stage
- 05Lock up stage
- 06Fixing and completion
At each stage:
Land settles first if not already owned- Builder invoices at each agreed stage
- Lender confirms progress before release
- Interest is usually charged only on drawn funds
Land plus build funding requirements
Typical combined loan features:
-
one facility can often cover both the land purchase and the build
-
existing land equity can often count toward the required contribution
-
the lender usually looks at total exposure against completed value
-
progress payments are usually tied to a fixed price contract
-
extra funds may still be needed for site works, variations or overruns
Combined loan snapshots
-
Vacant land plus build
One loan
-
Land already owned
Equity may help
-
Completed build
Loan converts
How combined land and build approval works
Lenders review
contract of sale for land if still to be purchased- fixed price building contract
- builder credentials and licence
- plans, specifications and council status
- total land and build cost breakdown
- land value or purchase contract
- borrower income, debts and servicing
Typical timeframes
-
Approval time
1-3 weeks
-
Progress draw approvals
2-5 days
-
Land settlement
Before build starts
-
Construction period
4-12 months
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Common problems
Financing land and construction together can be efficient, but problems usually arise when timing, valuation, builder policy or project costs do not line up cleanly.
Land settles before build is ready
A borrower may secure the land first but not yet have final plans, permits or a compliant build contract, which can delay the construction component.
Possible solutions include:
finalise plans and contract quickly- use a lender comfortable with staged timing
- hold enough funds for interim costs
- confirm expiry periods on approvals
Completed valuation is too low
The lender may assess the finished value below total land plus build costs, reducing how much can be borrowed.
Possible solutions include:
- increase contribution or equity
- review build scope and specifications
- check whether the end value assumption is realistic
- adjust the facility structure if needed
Builder or contract does not fit policy
Some lenders will only fund registered builders, fixed price contracts and standard residential construction types.
Possible solutions include:
- provide builder credentials and insurances
- move to an acceptable fixed price contract
- choose a lender with a better fit for the project
- consider whether owner builder lending is actually available
Steps to get Finance
Step
01
Confirm whether you are buying the land now or already own it.
Step
02
Obtain plans, builder pricing and a compliant fixed price contract.
Step
03
Submit land details, build documents and financial information.
Step
04
The lender assesses total exposure, servicing and completed value.
Step
05
The land component settles and the build component is set up.
Step
06
Progress payments are released until completion and conversion.
Speak with a Property Finance Specialist
Construction finance can vary depending on whether you are buying vacant land, already own the block, or want one loan to cover both stages.
A specialist can review the land, the build contract and the timing to see which lenders may be able to fund the combined structure.
Speak with a finance specialist about financing land and construction together
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