Construction Home Loans

Construction Loans

Building your dream home means that you get exactly what you want down to the very last door handle.

That also means there are a lot of decisions to be made, and many boxes to tick. Whether you are looking at a fixed price contract or managing the project yourself. The team at Mortgage Sure can help guide you through the process.

Obtaining a loan to build a house differs from a ‘regular’ home loan in many ways by teaming up with a mortgage advisor from Mortgage Sure we can help you manage the loan side of things so you can concentrate on the exciting things – to ensuite or not to ensuite – open plan living or separate lounge and dining?



The mortgage itself is the document that the bank uses to take security over your property. So when applying for a ’mortgage’, as most of us say, you’re not actually applying for a mortgage, you’re applying for a home loan.

When you apply to the bank for your home loan and the bank says yes, you can have one they give you the loan but also take out a mortgage over your home. Which means in the event that you cannot make repayments on your loan the bank has the opportunity to sell the house to recoup costs.

Hence the term ‘free hold’, people often use this term when they have finished paying off their home loan. The bank no longer has a mortgage over the property, therefore they own the house free of the hold of the bank’s mortgage.

How does buying land differ from buying a house?

This depends on what the purpose of the land is and how it is zoned. If you intend to build on the land within a certain period of time (generally 12 months) you can borrow up to 80% of the land’s value. However, if the land is not intended to be built on in the near future and is an investment, this is considered land banking and a deposit of 50% is usually required. The amount a bank will lend on the land also depends on it’s zoning, is it a residential section in the middle of town or lifestyle/grazing land in the country? Once you own the land, you can potentially use it’s value as equity towards building a dwelling.

I am looking at buying a house and land package, how do I go about applying for a loan?

A house and land package is where a building company will offer the opportunity to buy a section with a spec or ‘off-the-plans’ style new build included in the price.
An application for this type of loan is similar to any other application in that the bank will want to understand your financial position (income, assets, liabilities, spending habits) where it differs is that the bank also requires additional supporting documents so they can understand the particular house and land package you’re buying. This will include things like the sale & purchase agreement for the land, a fixed price building contract, plans and consents for the build and builders liability or risk insurance.

How do I know if I qualify for the Kainga Ora First Home Grant, that can be put towards my build?

The qualifying criteria for the Kainga Ora First home grant are as follows

  • have earned less than the income caps in the last 12 months
    • $95,000 or less for a single buyer
    • $150,000 or less for 2 or more buyers
  • not currently own any property, this does not include ownership of Māori land
  • have been contributing at least the minimum amount to KiwiSaver (or complying fund or exempt employer scheme) for 3 years or more
    • This equates to at least 36 months worth of contributions
  • purchase a property that is within the regional house price caps
    • Currently $525,000 or less for an existing home in Hastings & Napier or $600,000 for a new build or property less than 6 months old
  • agree to live in your new house for at least 6 months.
  • Have a deposit that is at least 5% of the purchase price. This can include the following
    • from your KiwiSaver first-home withdrawal
    • from your First Home Grant approval/ pre-approval amount,
    • that you have saved in the bank
    • you have already paid towards the property
    • gifted by a close family member.

Can I manage the construction of my own home?

Of course, This is known as labour only or an owner build style of construction. Your bank will require a larger deposit than if it was a fixed price contract (30%-40%) 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.

Mortgage & Insurance Advisers

Refinancing Home Loans

Not happy with your current bank, another bank is offering a product that is more suited to your needs? Why not consider refinancing.

Mortgage & Insurance Advisers

Next Home Home Loans

Upsizing? Do you have a growing family and need another room or a bigger backyard? Or maybe your kids have left the nest and it’s time to downsize and simplify? Let’s see what your options are.

Mortgage & Insurance Advisers

Holiday Homes

Many Kiwis dream of owning a holiday home, their perfect hideaway from the hustle and bustle of everyday life. Come chat to the team at Mortgage Sure and we will try to help make owning that holiday home a reality.

Mortgage & Insurance Advisers

Renovating Home Loans

Renovating (and maintaining your home) is the perfect opportunity to increase the value of your home whilst utilising the equity in your home to fund the alterations. Come talk to us about how to go about this.

Calculate Your Mortgage Repayments

Do a quick calculation to see what your repayments may be.

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