Buying and financing a new build
Building your dream home or buying a house off plans is exciting, but the choice of financing options can be confusing and difficult to navigate. We specialise in helping clients through the process, using our expertise and personal experience to find the solution that fits best.
What’s appealing about new builds vs existing homes?
Modern design and energy efficiency
New builds have contemporary layouts, energy-efficient designs, and modern appliances. With double glazing, insulation, and energy-saving technologies, new build homes offer lower running costs and are more sustainable.
Warranty and compliance
New builds are typically backed by a 10-year builder’s warranty and designed to meet modern building standards, giving you peace of mind and minimising the likelihood of unexpected repair costs.
Financial advantages
New build homes are typically exempt from Loan-to-Value Ratio (LVR) restrictions set by the Reserve Bank, allowing buyers to borrow up to 90%– 95% of the property’s value. This reduced deposit requirement makes new builds a more accessible option for first home buyers.
Exemptions from DTI rules
New builds are also exempt from the Reserve Bank’s Debt-to-Income (DTI) restrictions, allowing borrowers to potentially access higher lending relative to their income compared to purchasing an existing home.
Get the guide to buying and financing a new build
Get all of this information plus the important details in our guide. We break down all the options including their pros and cons, along with tons of tips to help you make smarter decisions on your home buying journey.
Why talk to Colab about building new?
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Seasoned pros at your service
Our small team has decades of experience in the banking and finance industry between us. Not only that, but we’ve personally been through the new build process multiple times ourselves, and that hands on experience gives us a genuine understanding of what our clients are going through, having been there ourselves.
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To us, it's personal
One of the benefits of a small team is that when you talk to us, you’re talking to the expert that’s going to walk you through every step of the process, not a call centre. We’ll get to know you and your plans, and guide you through each step with care.
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We can offer you true choice
Unlike a lot of mortgage brokers, we’re accredited with all the main banks and the smaller ones too. This means we can find the best deal in the market to suit you and your lifestyle. Saves you spending time shopping around too.
Our customers say it best
Understanding the different finance options for new builds
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Land and build contracts combine the cost of a plot of land with a fixed-price build contract, making them popular for buyers seeking clarity and control over their budget. Financing for these packages is typically structured in stages:
Land purchase: With your lender funding up to 80%-90% of the land value.
Construction loan: Funds are drawn down progressively as each building stage is completed (e.g., foundations, framing, and final completion).
How much can I borrow?
Financing for land and build contracts varies between lenders, with most banks generally offering loans for up to 80–90% of the total land and build cost.
Financing the land
If building isn’t on the cards for the next 12 months, banks typically lend between 50% and 80% of the land’s value, depending on the lender. On the other hand, if you’re planning to get started within a year, you could borrow up to 80%—or even 90%—if you’ve got a build contract lined up.
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A turn-key contract provides a streamlined and stress-free option. The builder handles the entire construction process, including financing, and you pay a fixed price upon completion. This means you don’t need to manage progress payments or worry about unexpected cost overruns.
Advantages of turn-key contracts:
Certainty: You know the exact cost upfront, reducing financial surprises.
Simplicity: There’s no need to coordinate payments or construction milestones— just move in once the home is ready.
Deposit flexibility: As with off-the-plans purchases, lenders often allow you to secure a turn-key property with just a 5–10% deposit.
While turn-key contracts may cost slightly more than a land and build arrangement, the convenience and predictability make them an attractive option for many buyers.
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Purchasing a newly completed home, such as those sold by companies like Fletcher Living, offers the ultimate in convenience. These homes are fully built, so you can inspect the property in its final form before committing.
Benefits of newly completed homes:
Immediate move-in: There’s no waiting for construction to finish—perfect if you’re looking for a quick settlement.
Fixed pricing: The price is set, and there’s no risk of cost overruns or unexpected changes during construction.
New build perks: Newly completed homes often qualify for LVR and DTI exemptions, just like off-the-plans or turn-key contracts.
Things to Consider:
Inspection: While the home is new, it’s still important to review the build quality and ensure it meets your expectations.
Availability: Stock may be limited, especially in high-demand areas, so it’s important to act quickly if you find a suitable property.
