Before You Sign

1. Does the lender actually want to lend in this postcode?

Lenders cap how much they will lend in any one building, street or postcode. You can be a strong borrower and still be knocked back because of where the property is. The guide helps you check that at least two lenders actively lend on your shortlist before you fall for a development.

2. Has the lender approved your builder?

Banks keep a list of builders they will lend against, and with builder insolvencies a real risk, they are stricter than they used to be. The guide covers builder approval, fixed-price contracts, building insurance, sunset clauses and variation costs, so a wobbly builder does not sink your loan.

3. Is your deposit ready at the right moments?

New builds do not work like an established purchase. House-and-land packages need progress payments at each stage, and off-the-plan apartments often need a deposit held for the whole build. The guide shows how to map your cash to the builder payment schedule, and where a deposit bond can help.

4. What happens if settlement gets delayed?

A pre-approval usually lasts about 90 days, but a build can take 12 to 24 months, and the bank reassesses you before settlement. If your borrowing power has dropped, you may not be able to settle. The guide covers how to keep your file settlement-ready through a long build.

5. What if the finished property is worth less than you paid?

You agree a price today, but the bank values the finished property at settlement, and it can come in below your contract price. The bank lends against the lower figure, so you cover the gap in cash. The guide shows how to stress-test for a 5% to 10% shortfall before you sign.

Why are investors and first home buyers moving toward new builds in 2026?

The 2026 federal budget changed how investment property is taxed, which has drawn both investors and first home buyers toward off-the-plan apartments and house-and-land packages. For the tax detail, see our 2026-27 Federal Budget breakdown and speak with your accountant. This guide covers the finance side.

Can I use a construction loan for an investment property?

Yes. Construction and off-the-plan finance is available for investment purchases as well as owner-occupied homes, though the deposit, serviceability and valuation checks can differ. The five questions in this guide apply whether you are buying to live in or to invest.

How do a construction loan and progress payments work?

A construction loan is drawn down in stages as each phase of the build is completed, and you generally pay interest only on the amount drawn so far. The guide explains how to line your cash up against the builder payment schedule.

What deposit do I need to buy off the plan?

Off-the-plan apartments often need a deposit held in trust for the whole build, while house-and-land packages use staged progress payments. Some developers accept a deposit bond instead of cash. The guide walks through the options so your cash is ready when the contract calls for it.

I am buying my first home. Should I read anything else?

Yes. If this is your first home, our Before You Buy guide covers the grants and schemes you may be able to use, including on a new build. Read both to cover the schemes and the new-build finance risks.