Home / Construction Loans
Construction Loans
Construction Loans: what it costs, how it works, and who it is not for. Every figure carries the source it came from and the date it was read.
What is a construction loan?
MACQUARIE - Credit Guidelines v14.0, 8 Jul 2026, section 'Construction Loans'. MAXIMUM LVR 80% - and note what that means next to the same document's 95% general ceiling: CONSTRUCTION COSTS A BORROWER FIFTEEN POINTS OF LVR AT THE SAME LENDER. The LVR is measured on the LOWER of the on-completion val Money Brain publishes the document and the date behind every line on this page, and states plainly where a position has not been read.
How current is this page?
Every figure on this page carries the source it came from and the date it was read. Where a lender-by-lender position has not been read at source, the page says so rather than repeating something from memory. Lender policy changes quietly and often.
What decides your answer
What is a construction loan?
MACQUARIE - Credit Guidelines v14.0, 8 Jul 2026, section 'Construction Loans'. MAXIMUM LVR 80% - and note what that means next to the same document's 95% general ceiling: CONSTRUCTION COSTS A BORROWER FIFTEEN POINTS OF LVR AT THE SAME LENDER. The LVR is measured on the LOWER of the on-completion valuation or the cost to complete (contracted price plus land value), so a build that values up on completion does not rele
How a construction loan actually works
MACQUARIE - THE RULE NOBODY PUBLISHES AND IT BITES THE EXACT CLIENT MONEY BRAIN WRITES: 'Construction component not to exceed 50% of loan size for loans > $1,500,000.' On a loan above $1.5m, no more than half of it may be the build. A knockdown-rebuild on an expensive block can fail on this alone while passing every LVR and servicing test.
The five progress payments, and what triggers each
MACQUARIE - UNACCEPTABLE PURPOSES, VERBATIM AND COMPLETE: loans to owner-builders; loans for kit or demountable homes; loans to builders or property developers for speculative investment; construction of more than 2 dwellings; and split contracts within multi-unit residential developments. The reason given for that last one is unusually candid and is quotable - 'unacceptable level of third party risk due to inter-dep
What decides your answer
Can you get one?
MACQUARIE - Credit Guidelines v14.0, 8 Jul 2026, section 'Construction Loans'. MAXIMUM LVR 80% - and note what that means next to the same document's 95% general ceiling: CONSTRUCTION COSTS A BORROWER FIFTEEN POINTS OF LVR AT THE SAME LENDER. The LVR is measured on the LOWER of the on-completion valuation or the cost to complete (contracted price plus land value), so a build that values up on completion does not rele
What you pay during the build
MACQUARIE - THE RULE NOBODY PUBLISHES AND IT BITES THE EXACT CLIENT MONEY BRAIN WRITES: 'Construction component not to exceed 50% of loan size for loans > $1,500,000.' On a loan above $1.5m, no more than half of it may be the build. A knockdown-rebuild on an expensive block can fail on this alone while passing every LVR and servicing test.
Land first, then build - how the two loans join
MACQUARIE - UNACCEPTABLE PURPOSES, VERBATIM AND COMPLETE: loans to owner-builders; loans for kit or demountable homes; loans to builders or property developers for speculative investment; construction of more than 2 dwellings; and split contracts within multi-unit residential developments. The reason given for that last one is unusually candid and is quotable - 'unacceptable level of third party risk due to inter-dep
What decides your answer
Is construction loan interest tax deductible?
MACQUARIE - Credit Guidelines v14.0, 8 Jul 2026, section 'Construction Loans'. MAXIMUM LVR 80% - and note what that means next to the same document's 95% general ceiling: CONSTRUCTION COSTS A BORROWER FIFTEEN POINTS OF LVR AT THE SAME LENDER. The LVR is measured on the LOWER of the on-completion valuation or the cost to complete (contracted price plus land value), so a build that values up on completion does not rele
Cost overruns and variations
MACQUARIE - THE RULE NOBODY PUBLISHES AND IT BITES THE EXACT CLIENT MONEY BRAIN WRITES: 'Construction component not to exceed 50% of loan size for loans > $1,500,000.' On a loan above $1.5m, no more than half of it may be the build. A knockdown-rebuild on an expensive block can fail on this alone while passing every LVR and servicing test.
If the builder goes under
MACQUARIE - UNACCEPTABLE PURPOSES, VERBATIM AND COMPLETE: loans to owner-builders; loans for kit or demountable homes; loans to builders or property developers for speculative investment; construction of more than 2 dwellings; and split contracts within multi-unit residential developments. The reason given for that last one is unusually candid and is quotable - 'unacceptable level of third party risk due to inter-dep
What decides your answer
If the build runs long
MACQUARIE - Credit Guidelines v14.0, 8 Jul 2026, section 'Construction Loans'. MAXIMUM LVR 80% - and note what that means next to the same document's 95% general ceiling: CONSTRUCTION COSTS A BORROWER FIFTEEN POINTS OF LVR AT THE SAME LENDER. The LVR is measured on the LOWER of the on-completion valuation or the cost to complete (contracted price plus land value), so a build that values up on completion does not rele
Which lenders do construction, and their build-time limits
MACQUARIE - THE RULE NOBODY PUBLISHES AND IT BITES THE EXACT CLIENT MONEY BRAIN WRITES: 'Construction component not to exceed 50% of loan size for loans > $1,500,000.' On a loan above $1.5m, no more than half of it may be the build. A knockdown-rebuild on an expensive block can fail on this alone while passing every LVR and servicing test.
What they want from your builder and contract
MACQUARIE - UNACCEPTABLE PURPOSES, VERBATIM AND COMPLETE: loans to owner-builders; loans for kit or demountable homes; loans to builders or property developers for speculative investment; construction of more than 2 dwellings; and split contracts within multi-unit residential developments. The reason given for that last one is unusually candid and is quotable - 'unacceptable level of third party risk due to inter-dep
Questions
MACQUARIE - UNACCEPTABLE PURPOSES, VERBATIM AND COMPLETE: loans to owner-builders; loans for kit or demountable homes; loans to builders or property developers for speculative investment; construction of more than 2 dwellings; and split contracts within multi-unit residential developments. The reason given for that last one is unusually candid and is quotable - 'unacceptable level of third party r
Sources and check dates
Lender lines on this page come from data the panel documents carry, read on 2026-08-09. Anything not read at source is named as unpublished.
Who wrote this page
Darren Parker, Credit Representative 501592, authorised under Australian Credit Licence 389328. Every figure here was read at source and dated. If a lender's position has changed since the date shown, tell him and it is corrected.
See where you stand before you decide anything
Updated 13 September 2026