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Building a house

Are you building the home of your dreams? Talk to us about how you can pay for it in a way that suits your needs.

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Get started with building a house


Decided to build? There are more decisions to make.

Would you prefer a small or large block? Are you after a modern or classic design? Are you knocking down and rebuilding, or getting a house and land package?

Once you've narrowed it down, you'll have a clearer idea of the type of loan you'll need.

Learn more about building options >

Applying for a home loan when buying land >

Choose the right loan for your needs

If you're buying a block of land to build on, or if you need a loan to build a house, there are different loans to suit your needs.

 

If you're buying land

Using an ANZ Standard Variable or an ANZ Fixed Rate loan as a land loan to purchase land to build on, you could:

See land loans

 

If you're building a house

Using an ANZ Standard Variable or ANZ Simplicity PLUS home loan to fund your construction, you could:

  • Make progressive payments, so you only pay interest on the funds you've used
  • Make interest only payments during your construction period
  • Make extra repayments once the loan has been fully drawn down and the option to apply to redrawdisclaimeravailable funds

See construction loans

Already have a construction loan with ANZ?

If you already have a construction loan with ANZ, our Construction Loan checklist (PDF, 67KB)disclaimercan help you find out what you'll need to send us for each stage to organise payment.

Things to consider when building a house

Apply for pre-approvaldisclaimerfirst

Before you choose your block and builder, talk to us to get an indication of what you may be able to borrow. Obtaining pre-approval may also help when you speak to your builder or developer, as you'll have a better idea of what extras or variations you can afford.

Apply for pre-approval

Buying off the plan

Signing a contract to buy a property before it's completed has some advantages. But it also comes with some potential risks to consider, such as the uncertainty of when the property will be completed.

Buying off the plan tips

Access your equity with a supplementary loandisclaimer

If you have equity in your existing home or investment property, you can apply to access it with a supplementary loan. Then you can use that money for a variety of different purposes according to your needs.

See supplementary loans

Are you building your first home?

If you're a first home buyer, you may be able to claim a First Home Owner Grant from your state or territory government.

See Grant options

Explore our home loans for building a house

Flexibility with plenty of features

ANZ Standard Variable

disclaimer

Principal and interest

Comparison ratedisclaimer

 
Discounted standard variable rate when borrowing 80% or less of the property value.disclaimer

 

  • Make extra repayments any time
  • Redrawdisclaimeravailable funds (if you make extra repayments)
  • Save on interest with an offset account ($10 a month)disclaimer

More on ANZ Standard Variable

  

Keep it simple with basic features

ANZ Simplicity PLUS

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Principal and interest

Comparison ratedisclaimer

 
Interest rate with special offer discountdisclaimer when borrowing 80% or less of the property valuedisclaimer

 

  • Competitive variable interest rates
  • Make extra repayments any time 
  • Repayments are interest only during your construction period

More on ANZ Simplicity PLUS

  

    See all rates Apply online

Have an existing ANZ Breakfree Package and want to link your loan? See here

Questions about building a house?

The cost of building a home depends on whether you’re:

  • buying a land and home package
  • demolishing an existing property and building a new property
  • buying a block of land to build on
  • building on land you already own.

In addition, there are other costs associated with buying property that you would need to consider, including:

  • Government charges, such as stamp duty, title transfer fees and registration fees
  • Legal fees for all the paperwork related to buying a property
  • Financing costs, such as loan application or establishment fees and lenders mortgage insurance (which, depending on the lender, is generally required if you plan to borrow more than 80% of the property’s value)
  • Home and contents insurance.

Find out more about these unexpected costs of buying property.

  

Stamp duty or land transfer duty is the tax that you pay when you transfer a property to your name. The amount of stamp duty depends on which state or territory you’re in and the property value (and any concessions, if available to you).

When you buy a house, generally you pay stamp duty based on the value of both the land and the house.

When you build a house, generally you only pay stamp duty based on the value of the land you’re buying. This means you don’t then have to pay stamp duty on the house you build, which could be a substantial saving.

Find out more about stamp duty and how it could affect you.

Stamp duty can be complicated, so be sure to check the specific rules for your state and territory.

  

There’s no clear-cut answer to whether building a house will save more money than buying a house. It’s just a matter of weighing up the pros and cons and deciding what would work best for you.

When you buy an established house, usually what you see is what you get. A building inspection and bank valuation could help you avoid any unexpected issues and it’s clear what you’re buying.

Building a new house isn’t as straightforward. First, it might mean continuing to rent or pay an existing mortgage while your house is being built, which is an added expense. Second, building brings the risks of scope creep, budget blowouts, difficulties with builders, tradespeople and suppliers, and delays caused by permits and weather.

However, when you build, generally you only pay stamp duty on the land, whereas when you buy, generally you pay stamp duty on both land and house. There may also be grants or concessions available to you if you’re a first home owner, and that could lead to substantial savings.

Find out more about buying vs building a home.

  

There are a number of factors that impact the cost of building a house.

1. Land costs

Your house needs to be built on a block of land. Where the land is and how big the plot is will affect how much it costs. Don’t forget, if you’re buying a block of land rather than rebuilding on an existing block you own, you’ll generally still need to pay stamp duty on the land, as well as any transfer fees.

2. Building costs

The size of the house and the quality of the materials will affect the cost of the build. Whether you choose a project home or a custom build will also make a difference to the cost.

3. Site costs

Site costs are the costs involved in preparing your land for construction and are usually charged by your builder on top of the build price. For example, if the soil quality on your land makes it difficult to work with, the land has a slope or it’s in a flood or bushfire prone area, site costs could end up costing you a significant amount of money.

Find out about some of the unexpected costs of buying a home that could also apply when you are building a home.

  

The key to staying within budget when building a house is to work out all the details beforehand and stick to the plan. Making changes during the build and adding extras could see your budget spiral out of control.

Here are 3 items to keep an eye on, that could affect your budget.

1. Estimated v actual costs

Under some building contracts, you may have the flexibility to decide on the exact fixtures and fittings later. An estimated amount is added to the contract and depending on the items you decide to go with, you’ll end up paying more or less than the estimated amount.

The more items you have in your contract which are estimates only, the more your final build cost can vary. If you want more certainty about your costs, it’s a good idea to nail down the details you can and keep variable or estimated costs to a minimum.

2. Contract variations

Contract variations are changes you make to the contract after you sign it. If you make changes to your build, the costs may increase and you may be charged a variation fee on top of that. The fees are usually stated in your contract. If you want to keep costs down, avoid contract variations where you can (or, if you do want to make a variation, understand what it will cost you before giving the go ahead).

3. Provisional sums

There are some items that a builder cannot put a fixed price on before starting the build. Usually these items are estimated and listed as provisional sums. If there are unforeseen challenges on the site, such as large rocks that need to be cleared or needing to dig your deeper to set the foundations, you might need to pay more than the initial contract price. It’s a good idea to set aside additional money to allow for these unexpected situations (which can be expensive).

Find out about some of the unexpected costs of buying a home.

  

Consider talking to an ANZ home loan specialist and applying for pre-approvaldisclaimer. With pre-approval, you’ll know how much you can borrow, which makes it easier to budget when you’re speaking with a builder or developer.

  

Before building a house, you should consider how you’re going to finance the build. There are two types of loans that could help you finance building a house.

1. Land loan

A land loan is a loan to buy an empty block of land. Most land loans require a higher deposit and have a higher interest rate than a regular home loan. Lenders usually expect you to buy land with the intention of building a property and there might be conditions that require you to build your house within a specific period.

2. Construction loan

If you’re building a home or doing major renovations, then a construction loan could be what you need. With a construction loan (and it depends on the lender), generally payments are released progressively during construction and you only pay interest on the amount that you’ve drawn down.

Find out more about ANZ's land and construction loans.

  

LVR stands for 'Loan to Value Ratio' and it's the amount you’re looking to borrow, calculated as a percentage of the value of the property you want to buy (as assessed by ANZ). For instance if you’re borrowing $400,000 to buy a $500,000 property, your LVR would be 80% (because $400,000 is 80% of $500,000).

LVR is important because it may affect your borrowing power. Generally, the lower the LVR the better, as it carries less risk for the lender. If your LVR is above 80% (that is, you're looking to borrow more than 80% of the value of the property you want to buy), you may need to pay Lenders Mortgage Insurance (LMI). This insurance protects the lender - ANZ, not you - if you default on your home loan and there’s a shortfall following the sale of the property. Generally speaking the higher your LVR, the more LMI will cost.

Learn more about ANZ LMI with our Key Fact Sheet (PDF 370kB) or read our article on Lenders Mortgage Insurance.

  

If you have money in an everyday banking account, you may choose to move it into an ANZ One offset account. You can link it to your ANZ Standard Variable loan or one-year ANZ Fixed loan to help you save on interest charges. The money you have in ANZ One will offset the amount you owe on your home loan, and you’ll only be charged interest on the difference.

A $10 servicing fee applies per month per offset account.

Find out more about offset accounts.

  

If you choose interest only, the minimum payment amount on your loan will be lower during the interest only period because you are not required to repay any of the loan principal. You will have to repay the principal down the track and so you may end up paying more over the life of your loan. There may be additional restrictions on the amount you can borrow or loan type you can select if you choose to pay interest only.

Choosing to repay principal and interest means that, with each repayment, you're paying off interest charges as well as some of the loan principal.

Learn more about payment types.

  

A comparison rate is designed to help you work out the total cost of a home loan by building the known costs like up-front and ongoing fees into that rate. It doesn’t include things like government charges, redraw fees or fee waivers. 

You can use comparison rates to help you compare the cost of different home loans with similar features. When deciding which home loan is right for you, it’s important to think about what features each home loan offers, and how much these matter to you. Keep in mind that you may not necessarily pay the comparison rate that is advertised for your loan type.  This is because, for example, you may not pay all the fees and charges which the comparison rate includes.

  

Connect with our home loan specialists or apply

Quick Start Home Loan Application

Get started in just 5 minutes. Apply for pre-approvaldisclaimer, a new home loan, refinance or top up your existing ANZ home loan.

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Visit a branch or ANZ Home Centre

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You can also chat to an ANZ accredited broker for help with your home buying, investing or refinancing needs.

   

You might also be interested in

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Thinking about building? Understand your options

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Tossing up between a house and land package and becoming an owner-builder? Here are some things to consider.

  

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Applying for a home loan when buying land

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If you’re planning on buying land in a new estate, you probably want to feel certain that you can borrow the balance when it’s time to settle. 

  

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Build or buy: Weighing up the pros and cons

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Here are some pros and cons to consider when deciding whether to build your own home or buy an existing home.

  

The information on this page does not take into account your personal needs and financial circumstances and you should consider whether it is appropriate for you and read the relevant terms and conditionsProduct Disclosure Statement and the ANZ Financial Services Guide (PDF) before acquiring any product. 

Applications for credit subject to approval. Terms and conditions available on application. Fees and charges apply. Australian credit licence number 234527.

Interest only loans are not for everyone and you should consider if this is the right strategy for you. Applications are subject to credit assessment.

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Terms and Conditions and eligibility criteria apply to ANZ Redraw. ANZ Redraw is not available on loans in a company name. For further information on ANZ Redraw please refer to the ANZ Consumer Lending Terms and Conditions (PDF 412kB).

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Property price information in an ANZ Property Profile Report is an estimate (not a valuation), may not be available for all properties, is for personal domestic use only and may change daily. Actual sale prices may differ. The report is not personal advice and ANZ takes no responsibility for any error or omission.

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Checklist current as at 31/01/2017. This checklist may not cover all individual scenarios, and there may be circumstances where ANZ may require other documents from you.

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Terms and conditions apply including a maximum loan term of 10 years. Minimum loan amounts vary depending on loan type. Fees and charges apply.

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ANZ may provide pre-approval (also known as approval in principle or conditional approval) to eligible customers who apply for an ANZ home loan and complete an application form and satisfy any other applicable requirements. Pre-approval is an approval for a loan subject to conditions being met, including that security is satisfactory to ANZ. Australian Credit Licence Number 234527.

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The interest rate shown includes an interest rate discount from the index rate and applies to home loan applications or renewals submitted on and from 19 March 2022. For ANZ Standard Variable, this discount is  for loans with a Loan to Value Ratio (LVR) of greater than 80% and  for loans with a LVR 80% or less. For ANZ Fixed, this discount is  for loans with a LVR greater than 80% and  for loans with a LVR 80% or less. This interest rate discount is not available for eligible loans linked to an existing Breakfree Package. Eligible loans linked to the Breakfree Package will receive an interest rate discount under the Breakfree Package. To view rates that apply to loans linked to the ANZ Breakfree Package and for more information, see here.

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Comparison rate calculated on a loan amount of $150,000 over a term of 25 years based on monthly payments, including any applicable interest rate discounts. These rates are for secured loans only.

WARNING: This Comparison Rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

For interest only variable loans, the comparison rates are based on an initial 5 year interest only term. For fixed rate interest only loans, the comparison rates are based on an initial interest only period equal in term to the fixed period.

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Property value is ANZ's valuation of the security property and may be different to the price you pay for a property.

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Please refer to ANZ Personal Banking Account Fees and Charges (PDF 100kB) for fees and charges that apply.

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The rate shown is the Simplicity PLUS Home Loan index less the applicable special offer discount. Rates are subject to change. Eligibility criteria apply to special offer discounts, including $50,000 or more in new or additional ANZ lending. Offers can be withdrawn or changed anytime.

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The rate shown is the Simplicity PLUS Residential Investment Property Loan index less the applicable special offer discount. Rates are subject to change. Eligibility criteria apply to special offer discounts, including $50,000 or more in new or additional ANZ lending. Offers can be withdrawn or changed anytime. 

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Rates shown apply during the interest only period of your loan. Choose from 1-5 year interest only terms for owner occupied on an ANZ Standard Variable (Land Loan up to three years) and ANZ Fixed (Land Loan up to three years) and choose from 1-5, 7 and 10 year interest only terms for residential investments on an ANZ Standard Variable (Land Loan up to one year), ANZ Fixed (Land Loan up to one year) and ANZ Simplicity PLUS. If you choose to make interest only payments on ANZ Fixed, your fixed period and interest only period will be the same. After the interest only period, your rate will switch to the applicable variable rate for a principal and interest loan. At the end of the interest only period, minimum repayment amounts may increase to cover principal and interest. Interest only loans are not for everyone and you should consider if this is the right strategy for you.

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ANZ Mobile Lenders operate as an independently operated ANZ Mortgage Solutions franchise of Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. Australian Credit Licence Number 234527.

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