Home loans for house and land packages

Buying a house and land package means you might not qualify for an ordinary home loan so you’ll need to find a loan that can be tailored to suit your needs.

Much of the new home construction that takes place in Australia nowadays is done by property developers. When land is released by the government, developers acquire that land and build the necessary infrastructure to turn it into a residential area. They then either build homes and sell them to homebuyers, or they sell blocks of land. This allows buyers to select land and then build a home on top, customised to suit their tastes.

The house and land are often purchased together but as separate contracts: one for the land and then another to build the home. And you need loans for both.

Getting a home loan for a house and land package

Financing for house and land packages can be split into 2 parts: buying the block of land and then building the home. While it’s possible to take out a separate loan with different lenders for each part of the process, the most common approach is to bundle the land purchase and the home construction together with the one lender.

In most cases, the land can be purchased with a straightforward mortgage loan, which most Australians are familiar with. Once settlement occurs on the land, you then take out a construction loan to finance the building of the house.

You can apply for these loans through a lender or talk to a mortgage broker. Keep in mind that some lenders may not offer construction loans.

Home loans for house and land packages ingredients2

How do home loans for house and land packages work?

With a house and land package, the regular mortgage applies to the vacant block of land you are purchasing. It works just like any other normal home loan: you have a deposit and you borrow the rest. Your lender then charges you interest and you make regular repayments to pay down the principal and the interest.

Once the land purchase has been settled and a mortgage has been registered on the title, the second part of buying a house and land package involves taking out a construction loan to finance the new home build.

The construction loan process

Construction loans are set up a little differently to typical home loans. Rather than borrowing a lump sum, construction loans allow you to draw down money in staggered instalments at set stages of the construction process – for example foundations, frame and brickwork, lockup and completion. These draw-down amounts are fixed when you apply for a loan, so you will need to supply fully costed construction plans to the lender before your loan will be approved.

Along the way, you will only pay interest on the amount you draw down from the loan. But once construction is complete and the builder has been paid, the full mortgage will be in force and you will have to pay interest on the entire amount.

Construction loans usually require you to build within a specified time frame, such as 1 or 2 years.

Finding the right loan

The good news is that it’s not really any harder to obtain financing for a house and land package than it is to take out an ordinary home loan. These types of loans are offered by banks and non-bank lenders across Australia, with most people choosing to bundle an ordinary mortgage and a construction loan together with the same provider.

If you want to buy a house and land package and create your dream home, compare the interest rates, fees and features on offer from a wide range of lenders. This will help you find the most affordable home loan for your house and land package.

Tips for buying a house and land package

When searching for a house and land package, be sure to do the following:

  • Visit multiple developments. Look at as many new developments and blocks of land as you can and get on a waiting list if the market is competitive.
  • Research the developer and builder. Make sure the developer has a track record of delivering new homes as promised. Visit previous developments if possible and check out display homes.
  • Research the surrounding area. Many new developments are on the fringes of city suburbs with fewer shops, schools and public transport. Some developers make big claims about new train stations and schools coming soon, but keep in mind that nothing is certain until it is actually built.
  • Check your builder's credentials. The builder must be licensed and have insurance. Again, check their track record and previous work if possible.
  • Work out exactly what you're looking for. After visiting a few sites and display homes you should have a clear idea of what you want and don't want in a house. A big part of buying land is tailoring the home construction to your needs. So communicate with the builder and get a very clear understanding about what is included and not included in the project.

Compare construction loans

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1 - 20 of 124
Name Finder Score Interest Rate p.a. Comparison Rate p.a. Fees Monthly Payment
Aussie logo
Principal & InterestInterest only5% min. depositOffset account
Aussie logo
Principal & InterestInterest only5% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.10.59%
Comp. Rate p.a.10.91%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 95%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
10.59%
Comparison Rate
10.91%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,383
Aussie logo
Principal & InterestInterest only10% min. depositOffset account
Aussie logo
Principal & InterestInterest only10% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.10.29%
Comp. Rate p.a.10.60%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
10.29%
Comparison Rate
10.60%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,350
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.99%
Comp. Rate p.a.10.30%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 85%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.99%
Comparison Rate
10.30%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,316
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.99%
Comp. Rate p.a.10.30%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 85%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.99%
Comparison Rate
10.30%
Fees
Application: $599
Ongoing: $0 per month
Monthly Payment
$1,316
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.79%
Comp. Rate p.a.10.10%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.79%
Comparison Rate
10.10%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,294
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.79%
Comp. Rate p.a.10.10%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.79%
Comparison Rate
10.10%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,294
Aussie logo
Principal & InterestInterest only5% min. depositOffset account
Aussie logo
Principal & InterestInterest only5% min. depositOffset account
Product NameAussie Activate Prime Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.59%
Comp. Rate p.a.9.80%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 95%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.59%
Comparison Rate
9.80%
Fees
Application: $0
Ongoing: $0 per month
Monthly Payment
$1,272
Coastline Credit Union logo
Interest only10% min. depositOwner-occupier
Coastline Credit Union logo
Interest only10% min. depositOwner-occupier
Product NameCoastline Credit Union Construction Loan
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.9.29%
Comp. Rate p.a.9.37%
Minimum Loan Amount$0
Maximum Loan Amount N/A
Maximum Loan Term30 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.29%
Comparison Rate
9.37%
Fees
Application: $300
Ongoing: $0 per month
Monthly Payment
$1,239
Aussie logo
Principal & InterestInterest only10% min. depositOffset account
Aussie logo
Principal & InterestInterest only10% min. depositOffset account
Product NameAussie Activate Prime Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.49%
Comp. Rate p.a.9.70%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 90%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.49%
Comparison Rate
9.70%
Fees
Application: $0
Ongoing: $0 per month
Monthly Payment
$1,261
Gateway Bank Ltd logo
Interest only5% min. depositInvestmentOffset account
Gateway Bank Ltd logo
Interest only5% min. depositInvestmentOffset account
Product NameGateway Bank Investment Construction Loan
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.9.43%
Comp. Rate p.a.9.50%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,000,000
Maximum Loan Term30 years
Maximum LVR 95%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.43%
Comparison Rate
9.50%
Fees
Application: $200
Ongoing: $0 p.a.
Monthly Payment
$1,255
Aussie logo
Principal & InterestInterest only25% min. depositOffset account
Aussie logo
Principal & InterestInterest only25% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.39%
Comp. Rate p.a.9.70%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 75%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.39%
Comparison Rate
9.70%
Fees
Application: $599
Ongoing: $0 per month
Monthly Payment
$1,250
Aussie logo
Principal & InterestInterest only25% min. depositOffset account
Aussie logo
Principal & InterestInterest only25% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.39%
Comp. Rate p.a.9.70%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 75%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.39%
Comparison Rate
9.70%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,250
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Aussie logo
Principal & InterestInterest only15% min. depositOffset account
Product NameAussie Activate Prime Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.39%
Comp. Rate p.a.9.60%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 85%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.39%
Comparison Rate
9.60%
Fees
Application: $0
Ongoing: $0 per month
Monthly Payment
$1,250
Aussie logo
Principal & InterestInterest only30% min. depositOffset account
Aussie logo
Principal & InterestInterest only30% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.19%
Comp. Rate p.a.9.50%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 70%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.19%
Comparison Rate
9.50%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,229
Aussie logo
Principal & InterestInterest only30% min. depositOffset account
Aussie logo
Principal & InterestInterest only30% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.19%
Comp. Rate p.a.9.50%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 70%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.19%
Comparison Rate
9.50%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,229
Aussie logo
Principal & InterestInterest only35% min. depositOffset account
Aussie logo
Principal & InterestInterest only35% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.19%
Comp. Rate p.a.9.50%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 65%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.19%
Comparison Rate
9.50%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,229
Aussie logo
Principal & InterestInterest only35% min. depositOffset account
Aussie logo
Principal & InterestInterest only35% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.19%
Comp. Rate p.a.9.50%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 65%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.19%
Comparison Rate
9.50%
Fees
Application: $599
Ongoing: $0 per month
Monthly Payment
$1,229
Coastline Credit Union logo
Interest only20% min. depositOwner-occupier
Coastline Credit Union logo
Interest only20% min. depositOwner-occupier
Product NameCoastline Credit Union Construction Loan
Interest Rate Typevariable rate
Repayment Type Interest Only
Interest Rate p.a.8.89%
Comp. Rate p.a.8.97%
Minimum Loan Amount$0
Maximum Loan Amount N/A
Maximum Loan Term30 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountNo
Split Loan FacilityNo
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
8.89%
Comparison Rate
8.97%
Fees
Application: $300
Ongoing: $0 per month
Monthly Payment
$1,196
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Aussie logo
Principal & InterestInterest only20% min. depositOffset account
Product NameAussie Activate Prime Home Loan
Interest Rate Typevariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.9.09%
Comp. Rate p.a.9.30%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 80%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
9.09%
Comparison Rate
9.30%
Fees
Application: $0
Ongoing: $0 per month
Monthly Payment
$1,218
Aussie logo
Principal & InterestInterest only45% min. depositOffset account
Aussie logo
Principal & InterestInterest only45% min. depositOffset account
Product NameAussie Activate Near Prime Home Loan
Interest Rate TypeVariable rate
Repayment Type Principal & Interest Interest Only
Interest Rate p.a.8.99%
Comp. Rate p.a.9.30%
Minimum Loan Amount$50,000
Maximum Loan Amount $2,500,000
Maximum Loan Term40 years
Maximum LVR 55%
Loan Redraw FacilityYes
Offset AccountYes
Split Loan FacilityYes
Fixed Interest OptionNo
Loan Portable
Extra Repayments Yes
Finder score
Interest Rate
8.99%
Comparison Rate
9.30%
Fees
Application: $599
Ongoing: $0 p.a.
Monthly Payment
$1,207
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Richard Whitten is Finder’s Money Editor, with over seven years of experience in home loans, property and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Graduate Certificate in Communications from Deakin University. See full bio

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2 Responses

    Default Gravatar
    RobertAugust 18, 2017

    Hi, we own an old house right out no finance on it and it needs to be knocked down and re build. However we don’t have a deposit but we have equity with our daughter newly purchased house in which we have borrowed over a mil dollar in home loan to secure our daughter dream. My wife and I have our names with our daughter in her new house deeds. What is the best option to have our old house to be built?

    Note: Our current bank lender is keeping both the old house and my daughter house deeds.

    Thank you,
    Robert

      Default Gravatar
      JonathanAugust 18, 2017

      Hello Robert,

      Thank you for your inquiry.

      We have a full-guide about home renovation and the different lending products you may take advantage from such as construction loans. Please take note that although some of them may still require some deposit (around 5-10%), they may be the most suitable option in the long-run in terms of interest repayments and by consideration of your capacity to pay.

      You may consider pre-approval with your current bank or speak to a mortgage broker to get into the numbers of knowing how much you need to spend versus your renovation goals.

      Hope this helps.

      Cheers,
      Jonathan

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