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 construction loans work.


You get a valuation

To get a construction loan, you will need a valuation to show what your house will be worth when it's finished.

We review the valuation

We will review the valuation and let you know how much you can borrow.

Payments made in stages

Your construction loan is designed to be paid out in stages, throughout your build. The money is usually paid direct to the builder or supplier, rather than to you and your deposit is used first.

Repaying the loan

During the project you only pay interest on the money already drawn down and you don't start repaying the loan itself until the project is finished. A construction loan is usually on a floating interest rate.

Other ways to finance your renovations.

Apply for a home loan

If you already own a home with plenty of equity, a regular home loan is another option.

For small to medium projects, you could borrow against your existing home and only pay interest on that loan to help keep costs down. You can change the repayment option to include the principal portion once the project is completed.

Find out about interest only loans

Use loan buffer or top up

For smaller projects, if you have a Westpac Choices Floating or 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 any time without having to reapply. If you need more money and meet our lending criteria, 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 apply for a new one just for your project. That means you can pay suppliers, buy materials on sale 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 date2. However, it is important to understand how interest is charged on credit cards before using it to fund your project. You can learn more here.

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 homes 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 Mobile Mortgage Managers, 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 Mobile Mortgage Managers can come to you, when it suits you best.

Find a Mobile Mortgage Manager

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.

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'.

Westpac's home loan lending criteria and terms and conditions apply. An establishment charge may apply. A low equity margin may apply. An additional fee or higher interest rate may apply to home loans if the application is accepted but does not meet the standard lending criteria.