Building vs Buying an Established Home: Financing Considerations
- marketing60313
- Sep 5
- 1 min read
If you’re deciding whether to build or buy an existing property, there are financing nuances:
Construction loans: When building, the lender releases funds in stages (slab, frame, lock‑up, fit‑out). You only pay interest on the funds drawn down. Construction loans often have slightly higher rates and require a fixed‑price building contract.
Progress valuations: Lenders will conduct valuations at each stage to ensure the build is on track.
Time limits: Some lenders require construction to be completed within a certain period (e.g. 12 months) – this can affect interest rates and fees.
Buying an existing home: Settlement is typically faster. You avoid construction delays but may need to budget for renovations.
A broker can help you compare construction loans and standard loans, ensuring the funding schedule aligns with your builder’s requirements.