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Owner Builder Loan

We are currently only accepting owner builder loans if you’re borrowing less than 60% of the value of the land plus the cost of construction.

Did you know that most banks only finance the construction of homes built by licensed builders?

Owner builder construction loans are available from a few select lenders if you have equity in your land, savings, or a guarantor that’s willing to provide additional security for your mortgage.

The lending guidelines can be tough but we can help!

How much can you borrow?

  • 95% of the project cost: If you’re a licensed builder building your own property. This is on a case by case basis only.
  • 60% of the project cost: If you’re not a builder, your loan will be limited to 60% of the land value plus cost of construction.
  • Kit homes: Our lenders can finance these as per the above guidelines. However, you must have either equity in your property or savings available so that you can finance the purchase of the kit upfront.
  • 100% loans: Borrow up to 100% of the land and construction costs with some of our lenders if you have a guarantor.
  • Low doc: Refer to the ‘Other Unusual Situations’ section on this page.
  • Owner builder development loans: Refer to the ‘Other Unusual Situations’ section on this page.
  • Discounts: Competitive professional package and basic loan discounts are available in some cases.

You may be able to borrow up to 100% of the land and construction costs by using a guarantor.

However, it can get quite complicated when it comes to owner builder projects so it’s best to get in touch to find out if you qualify.

Why are the banks so conservative?

In the past, many lenders were happy to work with owner builders. Since then, several banks noticed that there was a high incidence of people changing their plans, going over budget or not completing the project.

Because of this, many banks and building societies have withdrawn their funding for people that are building their own home.

Lenders tend to view some applicants more favourably than others.

Applicants that are licensed builders, have experience with one or more trades or are using a program such as the Home Building System are seen as a lower risk.

For more information on different lending policies or to speak to a specialist mortgage broker about applying for a loan, complete our enquire online or call us on 1300 889 743 and we can help you get approval!

Apply for owner builder finance

Our mortgage brokers understand the process of building a new home! We know which banks can approve your loan application and offer you a competitive interest rate.

  • Choose from four competitive lenders that accept owner builder home loans.
  • Our mortgage brokers can help you organise your cost estimates for the bank.
  • Avoid delays and headaches, work with the experts!

If you’d like our help to finance your project, then please call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will call you to discuss the amount you need to build your home.

Small developments

One of our lenders specialises in helping developers complete small projects, ideal for builders who are making the first step from building to developing but who may not yet have the track record of successful projects to easily get approval.

  • Simple finance is available for up to four dwellings up to $1,500,000.
  • Larger development projects can be financed if you have a strong asset position.
  • Some lenders don’t need proof of income if you plan to sell the properties on completion.
  • You can borrow up to 70% of the Gross Realisation Value (GRV) or 80% of the hard costs.
  • No presales are required for small duplex, townhouse and unit developments.

You may refinance your project on completion with a standard investment loan or low doc loan and keep some of the properties.

If you’d like our help to finance your project, then please call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will assist you in applying to ensure that you get approval!

Low doc owner builder loans

Licensed builders completing a small development of their own

We can help you finance a project of up to four dwellings, with a maximum loan amount of $1,500,000. You won’t need to provide any evidence of your income.

You can borrow up to the lesser of 70% of the Gross Realisation Value (GRV) or 80% of the hard costs (value of land plus cost of construction only).

Do I need to be a licensed builder to get a low doc loan?

We can’t assist you with construction finance if you need a low doc owner builder loan unless you are a builder.

However, we can arrange a low doc loan for up to 80% of the land value (not the on completion value) as well as 80% of the value of any other properties that you own.

Once your property is complete, we can then increase your low doc loan to 80% of the value of your property.

For more information or to speak to one of our expert mortgage brokers, please complete our free assessment form or call 1300 889 743 and we can help you apply with the right lender. Speak to us today!

Partially complete homes

Have you run out of money half way through your owner builder project? Has your bank refused to lend you additional funds to complete your home?

Unfortunately, almost every lender in Australia won’t accept a partially built home as security for a mortgage.

You must apply for the loan either before you start construction or when the construction is completed.

However, if you need additional funds during construction we can help you in the following situations:

  • Owner builder: We can lend up to 60% of the total cost.
  • Licensed builder building their own home: 75% of the total cost.
  • Standard construction with a licensed builder: 80% of the total cost.

The above loan amounts must be enough to pay out your existing mortgage and complete the construction of your property.

There are no exceptions to the above Loan to Value Ratios (LVRs).

Please call us on 1300 889 743 or enquire online and we can assist you in obtaining the funds you need to complete your project.

Note: For partially complete homes, we’ll charge a brokerage fee as there is significantly more work involved then there is for a standard home loan.

Using a guarantor with a construction loan

If you have a friend or family member that can guarantee your loan then you may be able to borrow more than 80% of the project cost and up to a maximum of 100% on a case by case basis.

For more information, please refer to our no deposit guarantor loan page.

Standard guarantor loans aren’t available so you’ll need to apply for an 80/20 guarantor loan.

This is where the guarantor takes out a mortgage on their property and then lends this to you to make up the difference between your 80% mortgage secured by your property and the amount that you require to complete the project.

For more information on how a guarantor can help you get a construction loan, please call us on 1300 889 743 or fill in our free assessment form. We can make the application process less stressful for you!

How are the loan funds advanced?

Unlike a traditional home loan, the lender won’t pay you all of the loan funds when the loan is setup. Instead, they’ll release funds to you as construction progresses.

This is known as ‘progress payments’ or ‘construction draw downs’.

Once you have completed each step of construction, a bank valuer will be sent out to assess your work, confirm you have followed the floor plans and then authorise the bank to make the next payment.

If you have significant equity available in your land then we may be able to arrange a line of credit based on the value of your land alone.

This will allow you to build your new home without the need for the lender to monitor your progress. This is usually available when you’re borrowing no more than 80% to 90% of the land value alone.

Which documents do you need to provide?

As an owner builder you’ll need to provide more documents than a traditional borrower:

  • Building plans / floor plans.
  • An itemized estimate of the total cost of construction.
  • A copy of your owner builder insurance (if applicable).
  • Evidence that you are using the Home Building System (if applicable).
  • A copy of your owner builder permit (if applicable).

Once you have obtained council approval you’ll be required to provide a copy of the council approved plans to the lender.

Value or Cost?

When lenders assess the value of a property that’s yet to be built, they ask their valuer to complete a ‘To Be Erected’ (TBE) valuation.

Typically, the valuer will look at the plans, the cost of construction and, in almost all cases, will value the construction project at the value of the land plus the cost of construction.

Lenders are always conservative when assessing the value of the property you’re using as security.

They will use the lesser amount of the actual valuation or the total of the purchase price / value of the land and cost of construction.

This is no different for owner builder loans and as a result it’s important to have significant equity in your vacant land otherwise you may be unable to obtain a loan approval.

Please complete our free assessment form or speak to us on 1300 889 743 for more information.

Our mortgage brokers will aim to assist you in getting the loan amount you need. Call us today!

What type of building license do you have?

There are many different types of building licenses with different restrictions placed on each one.

The lenders that we work with for owner builder finance tend to prefer borrowers who have an unlimited building license rather than a project management license.

If you have an unlimited building license, you’ll have a better selection of lenders to work with.

Of course if you don’t have a building licence at all then you’re still eligible for an owner builder loan, but you’ll need a larger deposit.

The golden rules

We’ve helped a lot of owner builders finance their construction project. Follow these simple rules to avoid the headaches!

Don’t run out of money
If you run out of money during construction then in most cases the bank won’t approve a loan increase for you. In other words, you’re in big trouble!
We have one lender that may be able to help if you run out of money. However, unless you’re a licensed builder yourself, they won’t lend any more than 60% of the project cost.

Don’t begin construction yet
Wait until your loan is formally approved before you commence construction.
The majority of lenders won’t approve a loan if you have already commenced construction. Unfortunately, many people aren’t told this by their bank.
Most people begin building using their savings and only apply for a loan towards the end of the project, when they run short of funds.

Budget carefully
Complete a cost estimate worksheet before beginning your project.
You’ll need to provide this to the bank as part of your loan approval. Please make this as accurate as possible and include a contingency in-case you go over budget.
If this isn’t done properly then you risk running out of money. In addition, try not to make many changes after your loan is approved because you may need to re-apply for your mortgage.

Experience counts
Are you sure you know what you’re doing?
If you have trouble creating the budget for your project or don’t have a background in the construction industry then we don’t recommend that you build your own home.
Inexperienced owner builders are almost certain to regret the decision to build their own home.

Do you need help to apply for your owner builder mortgage?

Please call us on 1300 889 743 or complete our free assessment form and one of our mortgage brokers will discuss your options with you.

Owner builder training courses

We strongly recommend that you complete the appropriate training before you begin your construction project. In some states, this is mandatory.

We recommend undertaking a course with ABE Education, a Registered Training Organisation that provides quality nationally accredited training to owner-builders in NSW and the ACT.

This training will enable you to obtain your owner builder permit/ licence and will assist with your finance approval.

ABE Education specialise in e-learning, which is simple, user-friendly and interactive. You can take as long as you wish to complete your course, as all your work is saved for the next time you log in.

Visit ABE Education website for more information. The contact details are:

ABE Education
Phone: 02 9798 5000
Fax: 02 9225 9656
Email: info@abeeducation.com.au
Website: http://www.abeeducation.com.au

How can we help?

Our mortgage brokers are specialists in home loans for people building their own home.

We know which lenders can help, how they will assess your application and even how to best present the cost estimate to ensure the loan is viewed favourably by the credit assessor.

If you’d like our help with your project then please call us on 1300 889 743 or fill in our free assessment form and one of our brokers will give you a call to discuss your situation.



Owner Builder Calculator

Owner builder details

Are you a licensed builder?
Can you prove your income?
How many dwellings are in the development?
Land value
$
Cost of construction (not inc contingency)
$
Estimate on completion valuation
$
Amount you owe on the property
$

Contact a mortgage broker

Please email me a copy of the results:
Yes No
Talk to one of our mortgage brokers about your situation: Yes No  

  • Alistair Bell

    I own a plot of land in southern QLD. I want to develop it as a hobby farm, so I’ll have some construction there which I believe will take 6 months. Will the bank view this as a issue, and whether I can lend the full amount for the construction or not?

  • If you are planning to get a mortgage to build a property on your own, most lenders will limit lending to 60% of the total land and construction value. There are 1-2 lenders that could go up to 80%, however your overall application should be very strong, like your credit history, genuine savings, financial position and employment history among others.

  • Watson

    I am looking for your help in identifying a lender to finance a project, which is to knockdown and re-build a semi-detached property in Kingsford, NSW. It’s for residential purposes and I’d like to execute this project as an Owner Builder. The estimated value of the property, post construction, is around AUD 1.5 to 2 mil and I’m looking for a loan at an LVR of 70-75%. Also looking to refinance an existing loan with CBA, which was used to purchase the land plus existing property and is now at 75% LVR.

    We have done a lot of research into this topic over the past six months and we understand the risks and challenges of an owner builder project. I personally have 15+ years of experience in managing large transformation projects for financial institutions and feel comfortable with the budgeting and legal aspects of an owner builder project. Can you guys help with this?

  • Hi Watson,

    Based on what you’ve stated, I expect we can get you approved. We’ve got a couple of owner builder specialists and as an owner builder loan is more complex, I think it’s best to meet in person and discuss it along with any other details you may have missed out. Please call us on 1300 889 743 and one of our brokers will go through your situation.

  • Lucy L

    I’m getting 2 houses ($700k each) built on land that I own. I had initially taken out a $1.4m loan with a bank and I owe $269k. My builder in in liquidation and one of my houses is partially complete. I want to build the rest of it myself. I have owner builder permits and $400k in savings although I own another investment property where I still owe $400k. Can I get $1m loan for constructing? I will of course live in the property upon completion.

  • Hi Lucy, right now the main problem that most lenders will identify is a high lend on an incomplete house. If you want to avoid an owner builder loan, you can potentially consider cash out. We do have a few lenders in mind that can possibly help and it’s likely that we can also get an exception based on the land value only. We will need to discuss your situation clearly and then speak with the lenders. Please call us on 1300 889 743 to speak with one of our owner builder specialists.

  • Ogilby

    I owe $110k on a piece of land worth $180k and I want to get an owner builder loan of $240k to build a residential house. I have $20k in cash and will be going full doc. The DA has approved it and there’s electricity, telephone and road access (spent $90k to fix all this). Can you guys help?

  • Hello Ogilby,

    It’s likely that the banks won’t accept your loan application as it is. The location may also prove to be a problem to the lenders. However, if we can change the situation then it can be more likely to be accepted, e.g. if you have a guarantor or you get a gift or loan from your parents, or you get a licensed builder. Please call 1300 889 743 to discuss this with an expert owner builder mortgage broker.

  • Austin

    Hi there, I applied for pre-approval with NAB 6 months ago and then there was a delay with council. I spoke to them yesterday and they said they don’t lend 80% for owner builder any more???

  • Hey Austin,

    Yes, that’s true. NAB have restricted their policy in this space. Unfortunately, some customers have been left in difficult situations as a result. There are other lenders that can help especially if you are a licensed builder yourself. If you’re not a licensed builder then the maximum you can borrow is now 60% of the property value.

  • Leigh Tipper

    Is there anyone who does Owner builder loans at the previous 80%. like the previous person I am in the same boat. Have 35% of the cost for land and house build. But now this has put me in the position of paying a larger amount for the house we want through a project builder.

    Leigh

  • Hi Leigh,

    Unfortunately no. If you are a builder yourself then we can lend you up to 95%. If not then you’re limited to 60%. You may be able to use a guarantor loan in some circumstances to allow you to borrow more. When the house is complete you can increase your loan and pay out the guarantor https://www.homeloanexperts.com.au/guarantor-home-loans

  • Luke Beardwood

    I am a licensed builder looking to build my own house, i work full time as an employee in the construction industry also with a good wage. I wish to borrow 85% of all construction and land costs, is this viable as i am licensed myself?

  • Hi Luke,
    Yes this is viable. If you’re using your own building licence then this is fine and we can assist you to borrow 85%. We’d need to know the full details of your situation to be sure. Please complete this form https://www.homeloanexperts.com.au/free-quote/ and we’ll complete a full assessment.

  • Deering

    I’ve got $80k savings and I need $30k to start building. I’m a registered builder but I currently owe around $60k. I can’t provide any financials at the moment I do have ATO notice of assessment. The bank I initially went with rejected my loan application so what should I do?

  • Hello Deering, you can consider getting a personal loan or a quick business loan. We can then help consolidate this for you so you can pay it off in your mortgage interest rate. If you want to discuss this in detail, please call 1300 889 743.

  • VH

    Own my own land outright valued $800k. Own existing house valued $560k, owe $80k. Got $340k in line of credit against existing house to put towards owner build project. Need total of $800k to build, inc contingency. Therefore need owner builder loan of approx $460. Will sell current house at end of build, or should we sell upfront and rent? Build will take approx 14 months. Can we get finance?

  • Hi VH
    Yes we can likely do an owner builder equity loan using the land as you have a significant amount of equity. 14 months is a very long time for a construction project of that type, I’m assuming you’re being conservative with this?
    Assuming everything else in your siutation is ok it is likely we can help you. https://www.homeloanexperts.com.au/free-quote/

  • Sandy

    Hi
    We own our land outright and have got our house to lockup (owner built). We now need an extra 80K to complete the build. Is there a lender which will do this. The land value is 290K and the house at this stage which we have paid into with our own funds is 200K.

  • Hi Sandy,
    Yes if it’s at lock up stage and we’re just relying on the land value then we can finance this. It’s a difficult loan and outside of most lender’s policies so it would be with a specialist lender at a higher rate and we’d need to charge a brokerage fee because of the small loan size and additional work.
    When the house is complete we can refinance to a mainstream lender.

  • Charteredparul Garg

    Hi,

    My name is parul, I can help you to get finance, please contact me on 0468763369, thanks

  • Charteredparul Garg

    Hi,

    My name is parul singhal and I have specialisation in owner builder home loan, please contact me on my mobile at 0468763369, thanks

  • Ed Wills

    Hi, I am looking at purchasing an unfinished home. I am looking at obtaining finance for the land value $250K (which will cover the purchase price) and this way I will get 80% LVR and then I would be looking at obtaining owner builder construction loan to finish the project. I anticipate 200K to finish it. Just wondering what my chances are of obtaining 60% of this amount? And will I need to show 40% deposit to obtain the 60%? Keeping in mind estimated value of property once complete will be between $800K – 1 million.

  • Hi Ed.
    This type of project can only be done by someone with a lot of cash or who has other property that can be used as security.
    We’d be able to lend you 80% of the land value only.
    The on completion value would be ignored by a residential lender as they assess the lesser of the project cost or valuation.

  • Lawry Williams

    Just want to clarify things! I am not a licensed builder and we have purchased a block of land freehold for 110k. The cost of construction we are looking at is around the 180k mark. Is the 60% plus the cost of construction mean theoretically could borrow say 240k or only 65 or so?

  • Hi Lawry,
    The calculation is $110k + $180k = $290k cost of the project.
    A 60% lend would mean you can borrow $174k.
    Unfortunately we can’t assist with loans under $200k.

  • KI

    Hi. I own outright land worth 1.765m. Would like to owner build a house and borrow $800k. Would there be a loan product where this is possible? Thx

  • Hi KI
    Yes this is something we can help with. This is known as cash out for construction and it is something that some lenders will do and others will not. Usually they’re concerned that the borrower will use the money for another purpose so providing us evidence such as the council approved plans will help us to choose from more lenders.

  • AG

    Hi I have a 75% finished house in Mathinna Tas 7214. I had it valued through a lender and it is now worth $125K. I tried for finance but the banks won’t lend me the money to finish the house because I am an owner builder and the house in not fuly finished. Land value would only be $12k. It needs another $25k to have it ready to be signed off by council. It needs the verandah finished as the veranda incorporates part of the structure for the deck supports and balistrade. Other than that deck is basically complete. There are other things the valuers said that meant it has “risk” attached. Such as, colourbond corner flashings, carpet in the bedrooms and benchtops and cupboard doors in the kitchen. I am slowly chipping away at it. But am now maxxed out on my personal loan borrowing power, which sits at $31K. The veranda would be about $9-10K including paying the builders. Kitchen needs $3-4K, carpet about $1500 and other minor things about another $1500. Is there anyway I can get finance? I would want to pay out the $30k I owe and borrow another $30k to finish the build. I’m confident I can complete it for $20k plus what I oweAn extra $10k would just allow for any contingencies.

  • Charteredparul Garg

    Hi Ki, we do owner builder finance, you can contact us on 0468763369, thanks

  • Charteredparul Garg

    Hi Lawry, we can help for finance under 200k, owner builder, you can contact us on 0468763369, thanks

  • Charteredparul Garg

    Hi Ed, we do owner builder finance. You can get 80% LVR against the land provided you fulfill the other requirements anticipated with this project. I want to know more about this project. Please give me a buzz on my mobile at 0468763369, thanks

  • Is

    Hi i own a house on a duplex site and wanted to build a duplex at the moment i owe 270000 and wanted to borrow 650000 to build each duplex will be worth 850000 on completion i am planning to live in one rent other just wanted to know what percentage i can borrow thank you

  • Hi Is,
    The total completion value is $850k each so $1.7mil total. The existing loan $270k plus the construction loan of $650k means a total of $920k.
    The total LVR would be approx 55%. Max borrowing generally would be 80% due to loan amount restrictions unless you subdivide, then the loan amount will be under $1mil each so should be fine to go 90%.

  • Charteredparul Garg

    Hi, in case of owner builder, we can borrow upto 60% of the total project cost, that is the value of land and construction amount, this is the first part, if you want to know in details plz contact us on 0468763369, thanks

  • Maxy

    Hi,
    Have land worth $265,000 owe $207,000.
    Savings of $150,000 and require $260,000 to complete build
    Would we qualify for an owner builder loan?

  • Hi Maxy,
    Yes you should qualify because you have a lot in savings. Don’t start construction until you have the formal loan approval.

  • Dav

    Hi,

    I have purchased land for $330K with 80% LVR so owing $264K at the moment. The land value has increased by approximately 50K since i purchased.

    I would like to borrow about 150 – 175K for the build. I have approximately 65K of savings to contribute to the project.

    Would i be able to borrow the amount above via an owner builder loan?

    I work for a project home builder and have 10years+ experience, I am the manager of my department. I also have a B.Construction Management UNSW. I do not have a builders licence though. Would there be any consideration for my experience and qualification?

    Thank you

  • Hi Dav
    Yes you should qualify as you should be below 60% LVR.
    Your experience wont affect lending as you aren’t the licence holder. If you held a building licence then you could borrow 95%. Please understand that common sense isn’t common with our banks!