What is a house and land package?
A house and land package combines a block of land with a fixed-price building contract, usually arranged through a developer or builder. Instead of buying an existing home, you're purchasing land and then having a home built on it — often with more control over layout, finish, and inclusions than an established property offers.
Financing a house and land package is different to a standard home loan. Two things need to be funded: the land purchase, and the construction of the home once the land settles. Most lenders combine both into a single facility so you don't need to manage two separate applications.
Key insight: The land portion of the loan is typically drawn in full at settlement, like a normal property purchase. The construction portion is drawn progressively as the builder completes each stage of the build — you're not paying interest on the full loan amount from day one.
How land and construction finance works
Once your land settles, the construction loan is released to your builder in stages rather than as one lump sum. Each stage is typically inspected or valued before the next drawdown is released, which protects both you and the lender against paying for work that hasn't been completed.
During construction, most lenders only charge interest on the amount drawn down so far — not the full approved loan. This keeps repayments lower while the home is being built, before the loan reverts to normal repayments once you move in.
Already have land, or need a builder too?
Not everyone starts a house and land package the same way. Some common starting points we help with:
- You already own the land and just need construction finance for the build
- You've found land but haven't chosen a builder yet
- You're starting from scratch and need both land and a builder
- You have a fixed-price building contract ready and just need it financed
If you don't have a builder lined up, that's not a blocker to getting your finance moving. We work with a network of trusted local builders across Melbourne's eastern suburbs and can help connect you with one suited to your budget, block, and timeline while your finance is arranged in parallel.
Pro tip: Get pre-approval sorted before you sign a building contract or make an offer on land. It gives you a clear budget to work with and strengthens your position when negotiating with a builder or vendor.
What lenders look for
Lenders assess a house and land package slightly differently to a standard purchase. They'll want to see a fixed-price building contract (not just a quote), the land contract of sale, council-approved plans where available, and confirmation the builder is licensed and appropriately insured. Getting these documents organised early speeds up approval significantly.
Land, build, and finance — sorted together, not separately.
A house and land package is two purchases rolled into one journey. The right lender structures your land and construction finance as a single facility, drawn down in the right stages, so you're not managing two loans or paying more interest than you need to. If you need a builder too, we can help there as well.
Book a Free Assessment →House and land package finance questions
Yes. Most house and land packages are financed with a single combined facility — the land portion settles first, then the construction loan is drawn down in stages as the build progresses. You don't need two separate loan applications with two different lenders.
During the build, you typically only pay interest on the amount drawn down so far, not the full approved loan amount. This keeps repayments lower while the home is being built. Once construction completes, the loan usually reverts to standard principal and interest repayments.
It depends on the lender and the combined value of the land and build contract, but many lenders work from a 10-20% deposit. First home buyers may also be eligible for government schemes that reduce the deposit required — a broker can check your eligibility.
That's a standard scenario. If you already own the land (or it's unencumbered), the lender assesses the construction loan against your fixed-price building contract and the land as security. You won't need the land-purchase portion of the finance.
That's common, and not a blocker to getting started on finance. We work with a network of local builders across Melbourne's eastern suburbs and can connect you with one that suits your budget and timeline while your finance is being arranged in parallel.
The lender pays the builder directly in stages as the build progresses — typically deposit, base, frame, lock-up, fixing, and completion. Each stage usually requires a valuer or inspector to confirm the work is done before the next drawdown is released.