House and land packages in Perth
House and land package finance in Perth
A house and land package in Perth is usually financed as two contracts, one for the land and one for the build, with your loan paid out to the builder in stages as the home goes up. We set the loan up around both contracts, so you know what's due, when, and what it costs along the way.
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How does a house and land package work?
With most house and land packages you sign a contract to buy the land and a separate contract with a builder to build the home, and the land settles first.
The advertised package price is the two added together. Your lender funds both contracts, but at different times.
The land settles first, like any property purchase. From that day you own the block and your loan starts. The build then gets underway, and the lender releases money to the builder in stages until your home is finished and handed over.
Packages are popular in Perth's growth corridors, such as Baldivis, Ellenbrook, Wellard and Alkimos, where new estates are still being released. In a new estate the land may not be titled yet, which means you could be waiting months before land settlement. That matters for timing, because pre-approval only lasts so long.
Building on a block you choose and a design you have drawn up yourself works in a similar way, but with more moving parts, and we'll cover that on its own page.
From land settlement to handover
During the build your lender pays the builder in instalments, called progress payments, as each stage of the home is completed.
Land settlement
Your loan funds the land and your deposit goes in. You now own the block, and interest starts on the amount drawn.
Builder's deposit
Paid when you sign the building contract, usually from your own funds or the loan, depending on the lender.
Slab down
The concrete slab is poured. This is often the first progress payment.
Frame and roof
Payments follow as the walls reach plate height and the roof goes on.
Lock-up
Windows and external doors are in, and the home can be locked.
Completion and handover
The final payment is made once the home is finished, inspected and ready for handover.
Before each payment the builder sends an invoice, you sign off on it, and the lender may inspect the work before releasing the money. The exact stages and amounts are set out in your building contract, and they vary between builders.
Interest while your home is built
During the build you generally pay interest only on the money drawn so far, so your repayments start small and grow with each progress payment.
After land settlement you're paying interest on the land portion. Each stage adds to the balance, and to the interest. Many lenders let you pay interest only during construction, then switch to full principal and interest repayments once the home is finished.
If you're renting while you build, you'll be covering rent and loan repayments at the same time, sometimes for a year or more. We map that out with you upfront, so the overlap isn't a surprise and your budget can carry it.
You can see roughly what full repayments could look like once the home is complete with our mortgage repayment calculator.
Grants, duty and low deposit options
A house and land package is a new home, so first home buyers may be able to use the First Home Owner Grant, a transfer duty concession and a low deposit loan together.
First Home Owner Grant
New builds can qualify for the WA grant if the land and build together sit under the value cap. See our First Home Owner Grant WA page.
Transfer duty
With separate land and build contracts, duty is usually worked out on the land value only, not the build. Estimate yours with our stamp duty calculator.
Keystart
Keystart lends for house and land packages and new builds with a small deposit. See our Keystart home loans page.
5% Deposit Scheme
The federal scheme can be used to build on vacant land as well as to buy. See our 5% Deposit Scheme page.
Things to check first
Before you sign a house and land package, check the building contract price is fixed, the builder is registered, the timeframes are realistic, and the lender's valuation is likely to support the price.
- A fixed price contract. Most new home contracts are a lump sum. Check what's included, what's a provisional sum, and who pays for site costs such as soil classification, retaining and fencing.
- The builder's registration. In WA, home building work over $20,000 must be done by a registered builder. You can check the register of builders on the WA Building and Energy website, and you should receive a home indemnity insurance certificate before you pay a deposit.
- The builder's deposit. For most home building contracts the builder can take no more than 6.5% of the contract price before work starts.
- Timeframes. Check when the land is expected to title, when the build starts, and how long the contract allows to finish. Delays add interest and rent.
- The valuation. Your lender values the finished home, not the brochure price. If the valuation comes in lower, you may need to cover the difference.
- Variations. Changes after you sign usually cost extra, and your lender may need to approve anything that changes the structure or the price.
WA home building contracts don't usually have a cooling off period, so it's worth getting the finance side clear before you commit, not after.
How we help with your build
We look at both contracts, find a lender whose construction loan suits the build, and stay with you from land settlement to the final progress payment.
Have a chat
Tell us about the package, the estate and your deposit. No jargon, no obligation.
We review the numbers
We look at the land and building contracts, the timeframes, and any grant or scheme you may be eligible for.
Choose the loan
We compare construction loans across our lender panel and show you how each handles progress payments and interest.
Build to handover
We hold the pressure points, from land settlement through each progress payment, until you get the keys.
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Frequently asked questions
Are house and land packages in Perth good for first home buyers?
A house and land package can suit first home buyers because new homes may qualify for the First Home Owner Grant, and the price is set upfront in a fixed price contract.
The trade-offs are the wait for land titles and the build, and paying rent and interest at the same time. We help you weigh both sides.
How do first home builders in Perth finance the build?
First home builders usually use a construction loan, which pays for the land at settlement and then pays the builder in stages as the home is built.
Most lenders on our panel offer construction loans, and they differ in how they handle inspections, the builder's deposit and interest during the build.
When do repayments start on a house and land package?
Repayments usually start soon after land settlement, on the amount the lender has drawn so far, and increase as each progress payment is made.
Once the home is finished, the loan generally moves to full repayments on the whole balance.
What if the valuation is lower than the package price?
If the lender's valuation comes in below the package price, the lender will usually only lend against the lower figure, so you may need a larger deposit to cover the gap.
We can talk through how lenders on our panel approach new build valuations before you sign.
Talk to us about your house and land package
A first chat with Oui Finance is complimentary, and we'll walk you through how your package could be financed, from land settlement to handover.
Send us a few details and one of our brokers will be in touch. You can also call us on 0448 383 336.
This page is general information only and does not take your personal circumstances into account. Construction loan features, progress payment stages and inspection requirements differ between lenders and builders, and grant, scheme and transfer duty rules are set by government and can change. Oui Finance does not provide legal or tax advice, so consider independent advice on your land and building contracts. Lender credit criteria, terms, conditions, fees and charges apply, and your full financial situation will be reviewed before any offer or product is accepted.