Construction Loan Calculator
How a land loan and construction loan work together
Inputs used in this estimate
Total loan at completion
—
land loan plus all progress payments
Repayment after completion
—
principal & interest per month
Interest during build
—
interest-only, across all stages
Repayments through the build
Interest only until practical completion| Stage | Drawdown | Running balance | Monthly repayment | Months | Interest in stage |
|---|
Loan balance by stage
Monthly repayment by stage
Interest only during buildPrincipal & interest after completion
After practical completion
| Total loan required | — |
| Interest rate used | — |
| Loan term from completion | — |
| Monthly repayment — principal & interest | — |
| Fortnightly equivalent standard: solved on the fortnightly rate, not monthly ÷ 2 | — |
| Total interest over the loan term assumes rate and repayment unchanged; offset not applied | — |
What typically matters here
- The land loan comes first. Land usually settles well before the build contract is finalised. The initial loan covers the land and purchase costs less the deposit, and is often set up as principal and interest until the construction loan is in place.
- The construction loan replaces it. When the build contract is ready, the construction loan is typically a new facility for the full amount — it repays the land loan and then funds each progress payment as the builder invoices for completed work.
- Interest is charged on what has been drawn, not the approved limit. This is why repayments start low and step up at each stage. The figures above are interest-only; most lenders move the loan to principal and interest at practical completion.
- Serviceability is assessed on the full amount. The maximum loan is assessed at the outset on the complete figure, even though it is drawn in stages. A rate change between land settlement and the build application can affect what the lender is prepared to approve.
- Variations and a buffer. Site costs, upgrades and variations are common. Lenders generally expect these to be covered from your own funds, which is why surplus savings held in an offset account are useful during a build.
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Understanding how the land loan, construction loan and progress payments fit together before you sign a build contract changes the outcome people experience.