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When striving to climb onto Sydney’s property ladder, first home buyers often discover building in a new area to be an affordable and enticing leg-up.

Whether starting from scratch in a new estate, or rebuilding in a long-established neighbourhood, finance needs for new builds differ from those for existing homes.

Two-step Process

Typically, when purchasing an existing house, the bank gives the buyer a lump sum of the loan amount at settlement. But when buying a home and land package or building on an existing block, it works differently. In these cases, the bank gives the customer one loan to buy the land and a second loan, a construction loan, to build the property. Both builder and owner are protected by working to a series of progress payments due only when set construction milestones are achieved. As interest on a construction loan is only charged on the amount drawn down at the time it’s calculated, the progress payments can be a handy saving, especially if rent must be paid elsewhere.

Striking a Balance

It’s essential that all prospective home owners are clear on how construction loans work before they enter into a contract, says Eden Brae State Sales Manager, Bill Hawie. “We’re totally upfront so that Eden Brae customers can factor payment options into their lending criteria,” he says.  

As winner of the prestigious HIA NSW Professional Major Builder Award for the 11th time, Eden Brae Homes is an expert on helping Sydneysiders to finance and build their own home. “Naturally, clients don’t want to pay a lot of money in advance for a home that’s yet to be built, and a builder is reluctant to start without some kind of monetary commitment, says Bill. “We find that our recommended payment schedule for construction loans works really well for both parties because it’s balanced and equitable.”


Eden Brae’s six-part payment plan allows buyers to secure a contract with a five per cent deposit. Payments of between 20 and 25 percent fall due at specific stages: pouring of concrete, erection of frame, completion of brickwork and buildings. A final 10 per cent is paid when the home is finished.

“At each construction milestone, the lender will inspect the work and only when they’re happy will they release payment,” Bill says. “We also ensure independent auditors check our work at these critical structural points.” Operating this way gives our customers a feeling of control, says Bill. “They can see the progress of their home and, at the same time, we receive payment for the building work we’ve completed.”

Do the Sums

Before you even think about looking at what’s available, it’s vital to ensure you have the funds to afford your new home. “Eden Brae Homes holds regular information evenings for prospective home buyers and that’s the very first thing we cover – to be 100 per cent confident that you can afford the home you’ve set your heart on before you do anything else.”

Speaking to lenders about finance is an important first step before actively starting to select builders. Eden Brae Homes partners with specialist construction loan provider MyMortgagePlus to make it easier for buyers to choose the right type of home loan for their particular circumstances.

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