Construction loans.

Renovating or building a home can take time. A construction loan is specifically designed to keep your costs down while the work is being carried out.

How it works.


You can borrow up to 90%

Depending on the type of contract, we may lend up to 90% of the construction contract price².


Depending on the amount you’re borrowing, you may need to provide a valuation.

Payments are made in stages

The loan is progressively drawn down as the builder invoices you. The money is usually paid direct to the builder or supplier and you only pay interest on the amount you’ve drawn.

Repaying the loan

During the project you only pay interest on the money already drawn down and you don't start repaying the principal itself until the project is finished⁴. A construction loan is usually on a floating interest rate during the construction period and can be fixed upon completion. You can fix the interest rate on drawn down portions of your loan twice during the construction period, if you want.

Other ways to finance your renovations.

Apply for a home loan

If you already own a home with plenty of equity, you might be able to set up a new home loan specifically for your small to medium project. While the work is being done you might be able to only pay interest on the loan. Then when the work is complete you could change the repayment option to include the principal portion (the portion you borrowed initially).

Find out about interest only loans

Use loan buffer or top up

For smaller projects, if you have a Westpac Choices Floating or Choices Floating with Offset Home Loan and are under your loan limit (because you've been paying more than the minimum repayment amount), you can draw the extra money out at any time without having to reapply. If you need more money and meet our lending criteria and responsible lending inquiries, you can ask us for a top up - and if approved - we can usually arrange it on the spot1.  

Find out about topping up and redrawing

Use a credit card

For small items such as buying materials and appliances - you could use your credit card. You may consider extending the limit or applying for a new credit card just for your project. That means you can pay suppliers, buy materials and get up to 55 days interest free on purchases made with selected Westpac credit cards when you pay off your balance in full (excluding balance transfers) by the payment due date3. However, it is important to understand how interest is charged on credit cards before using it to fund your project.

Find out about Westpac credit card options

How much can I borrow?

The amount you can borrow depends on the current or projected value of your home or project and your ability to repay the money depending on your income and the repayments. Here are some general guidelines:

  • For simple renovations - up to 80% of your home's value if you're topping up your loan
  • For major building work (with fully managed turn-key contracts) - up to 90% of your home's projected value. A low equity margin (LEM) may apply
  • For a partial or build only contract - up to 80% of your home's value
  • For labour-only contracts - up to 65% of your home's value
  • If you're buying and building on a residential section - up to 80% of the land value and up to 90% of the projected completed value when you build on it if you use a fully managed turn-key contract.

Learn more about constructions loans and how much you could borrow. Or speak to one of our Home Loan Experts, or visit your nearest branch.

Monitoring your project

Depending on the amount you want to borrow, you may need to get valuations at different stages of the project. Cost overruns are common during building work, so it's important to keep track of your budget and make adjustments as the project progresses rather than find out later you can't afford to complete it.

Get in touch.

Meet with an expert

Our Home Loan Experts can come to you, when it suits you best.

Find a Home Loan Expert

Talk to us

Call us from 8am to 6pm Monday to Friday, 9am to 3pm Saturday.

Call 0800 177 277

Visit us

Make an appointment to talk to a Home Loan Expert in branch.

Find your nearest branch

Things you should know.

1 Westpac lending, terms and conditions apply. 

2 High LVR loans are only permitted for a new build with a single fixed price contract that specifies a completed, ready to live in property. We may require you to protect against loss of deposit, non-completion and workmanship risks with a satisfactory insurance product. A low equity margin may apply.

Interest free days give you access to interest-free credit - if you pay off your balance in full (excluding balance transfers) by the payment due date. Cash advances, balance transfers and interest rates and fees are not purchases and have no interest-free days. To find out more see 'How does credit card interest work'.

4 There are no principal payments required during the build process. With an interest only loan, you’re repaying only the interest amount as it accrues on your outstanding balance, and none of the principal. An interest only loan will cost you more interest in the long term because you're not paying off any of the principal during your interest only period. You must start paying principal and interest on the loan within 12 months of the first drawdown.

Westpac's home loan lending criteria, terms and conditions apply. A low equity margin may apply.