Land & Construction Loans

Need a loan to fund building or extensive renovations? A land and construction loan means you have the lowest possible repayments during the construction phase.

Smiling couple in a house that needs renovating discussing plans

Renovating or building your dream home?

A land and construction loan provides funding for building property or extensive renovations so you have the lowest possible repayments during the construction phase.

Land and construction loans generally operate as an interest-only facility with a variable interest rate during the construction period, before reverting to the standard home loan package you have negotiated with your lender. During the building or construction period, you only pay interest on the part of the home loan that has been drawn down, or paid out.

If you’re looking at a house and land package, you will generally use a regular residential home loan and not a construction loan to finance your purchase.

If you're thinking of building your own home from scratch, it's a smart move to research your finance options before you enter into a building contract.

We provide loan solutions for buying land, building new homes, purchasing off-the-plan and house & land packages. 

Securing a loan to build a home is a little different than buying an established house because often the land and building purchase will need to settle separately.

The application stage 

To accommodate this, your lender will likely manage your initial loan as two separate but simultaneous applications - one for the land purchase and the second for the completed house and land cost.

The second application will eliminate the first loan and leave you with just one loan.


The construction stage

The construction of your home or completion of your major renovation will generally be conducted in stages, with payments required at the end of each stage. Your construction contract will detail the exact cost of the build, with the cost broken down into the payments the builder requires at each stage.

As each stage of your home is completed, the builder will invoice you for that stage. Assuming you are happy with the work, you will submit that invoice, along with an authority from you instructing your lender to pay the builder, to your lender for payment. For major construction, your lender will generally also inspect the property and may value the property at each stage to ensure you will have sufficient funds to complete the process. Once all parties are satisfied, your lender will then pay your builder on your behalf.



The bank or lender only charges you on the amount of money you have drawn down, therefore your minimum repayment will vary depending on which stage your home has reached.

While most construction loans have a variable interest rate, there are some available that operate as fixed rate loans. If you do use a fixed rate construction loan, you may end up with one rate on your land loan and a second rate on your construction loan.


We compare and negotiate competitive interest rates.

We have access to NZ's widest panel of banks and lenders.

We can help you tap into your KiwiSaver and HomeStart grant.

We're the largest group of Mortgage Advisers in New Zealand.

Considering a Turn-Key solution?

If you’re interested in understanding more about what a Turn Key loan involves, get in touch.

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  • A Turn Key house and land package (also known as a Land & Build package) is exactly what it sounds like: it’s a newly-built home where you turn the key in the lock and move right in! They are marketed as a complete package at a pre-determined price, prior to the house being built.

    These have increased in popularity recently and although they may be considered a little more expensive than a construction loan, some would argue they offer some significant advantages over a construction loan.

  • Advantages of a Turn Key loan over standard Construction loan:

    • The contract itself is usually quite simple, in the form of a standard sale and purchase agreement with an accompanying fixed price contract between you and the building company. 
    • Only a small deposit: You will typically have to pay a deposit to indicate your interest in purchasing, which is usually around 10% of the total price. The balance is then payable upon build and project completion.
    • No mortgage repayments during the build
    • Less conditions to be met when applying for finance
    • Mortgage repayments only start after the Code of Compliance (CCC) has been met and you have moved in.
  • There are also cons to the Turn Key solution, the largest one being that the offer of finance typically lasts a year.

    If there are delays that result in the build taking longer than this, you may need to reapply for finance: this could be risky because you might not meet the finance criteria. If this was the case you would need to sell the property before it is ready or try to exit the contract and get back your deposit.