Funding That Builds Your Vision

Construction loans differ from standard mortgages—they are drawn down in progress payments based on project milestones to ensure funds are released as needed, reducing interest costs. Generally, construction loans are also Interest Only Repayments for the duration of the build.

• Land Settlement – If land purchase is required, funds are released upfront.
• Site Preparation & Foundations – Initial drawdown for early works and approvals.
• Frame & Lock-Up Stage – Further payments as the build progresses.
• Final Fit-Out & Completion – Last drawdowns before handover.

Depending on the value of your transaction, a valuer or quantity surveyor will either inspect the site at each payment stage or prior to the first & final drawdown, ensuring the project is on track and criteria is met for smooth funding.

The type of building contract you choose affects how lenders assess your construction loan and determine funding terms. The two most common structures are:

• Fixed-Price Contracts – The builder provides a set price upfront for the entire project, with payments drawn at key stages. This contract is preferred by most lenders as it reduces risk, provides cost certainty, and simplifies loan approvals.
• Cost-Plus Contracts – The builder charges for materials and labor as the project progresses, with costs subject to change. This structure offers flexibility but is harder to finance, as lenders require detailed cost breakdowns and strict project controls to approve funding. Very common for luxury builders.

Which One is Right for You?

Lenders generally favour fixed-price contracts because they provide clear cost estimates and reduce financial risk. With Cost-plus contracts becoming more common for luxury homes, the Bank may require higher deposits, additional contingencies, or private lending solutions. At By Invite Finance, we assess your project structure and align you with lenders that support your preferred contract type, ensuring a smooth funding process from start to finish.

Construction loans are ideal for single homes, duplexes, and townhouses where the borrower plans to live in, rent out, or hold the property long-term. These loans are structured with progressive drawdowns and are assessed similarly to residential lending. In contrast, Development Finance is designed for larger-scale projects such as apartment blocks, townhouse developments (4+), and commercial complexes, where properties are typically sold upon completion or retained for investment portfolios. Development loans often involve higher borrowing amounts, multiple funding sources, and stricter lender criteria, including pre-sale requirements and feasibility assessments. At By Invite Finance, we help structure the right finance solution tailored to your project scope, exit strategy, and risk profile, ensuring you have the right funding in place from start to finish.

Securing finance for large-scale commercial developments through major banks has become increasingly challenging due to stricter risk policies introduced during the COVID boom. Banks now demand significant pre-sales (often 50% or more) before approving loans to ensure guaranteed cash flow and reduce exposure. Additionally, Loan-to-Value Ratios (LVRs) for commercial developments are generally lower than residential projects, often capped at 60-70% of the Gross Realisation Value (GRV). For developers seeking higher gearing, greater flexibility, or looking to avoid pre-sale restrictions to attain higher sale prices closer to / post-completion, we structure alternative funding solutions through private lenders, mezzanine finance, and structured debt arrangements. At By Invite Finance, we connect you with lenders who understand market potential and offer funding solutions that align with your development strategy—without restrictive pre-sale or contribution requirements.

Residual stock finance is a specialist loan product designed for developers who have completed a project but still hold unsold properties. Instead of being forced to sell units quickly, this type of finance allows developers to release equity from completed stock, providing flexibility to hold, lease, or reinvest in new projects. Lenders assess residual stock finance based on rental yield, market demand, and overall debt exposure. Banks often have tighter restrictions on LVRs for residual stock (typically 50-65%), whereas private lenders and non-bank institutions offer higher gearing and more flexible terms.