Of course, this is known as labour only or an owner build style of construction. Your bank or lender will require a larger deposit than if it was a fixed price contract, and will require robust quotes and plans to support your build. A larger contingency fund will also need to be built into your budget to cover cost overruns as these are more common with owner builds.

When buying land, banks and lenders want to understand why you are purchasing the land and how it is zoned. If you intend to build on the land within 12 months you can borrow up to 80% of the land’s value. However, if you have no intention of building on the land, banks and lenders may consider this land banking and a deposit of 50% may be required. Furthermore, the amount a bank or lender will lend on land also depends on whether the land is zoned for apartments, residential property or lifestyle and grazing.

A house and land package is where a building company sells you a section with a spec or ‘off-the-plan’ style new build included in the price. An application for this type of loan is similar to any other application in that the bank or lender will want to understand your financial position. Where it differs slightly is that the bank or lender also requires supporting documents to understand the house and land package you are buying. These documents include a sale & purchase agreement for the land, a fixed price building contract, plans and consents for the build and builders liability or risk insurance.