Different stages of building a house

Building a home from the ground up could be a great way to turn your dream home into reality. However, there’s a lot of work that goes into home construction. But before anything else, you need to get your financing in order.

When building a house, a construction loan is a common financing solution for many. Unlike the standard home loans, a construction loan is released in stages following the phases of home construction. There are typically five stages of building a house, which are:

Stage 1: Foundation 

This is when the builders prepare the lot for construction. This may include clearing the land, excavating, drainage, or additional groundwork, if necessary. This is also when the initial plumbing beneath the slab and underground connections will be done. After the ground has been prepared, the concrete slab or stump foundation will be laid out. 

Laying the foundation is the first and most crucial step of the construction. The foundation will support the entire structure of the house. This step can take anywhere between one to two months, depending on the soil conditions and the type of foundation used. 

The foundation is considered complete when the slab is poured and a temporary fence is built around the property. Usually, 15% of the construction loan will be released at this stage.  

Stage 2: Framing and brickwork 

This is when you’ll really start to see your home take shape. The framing of the house will be installed during this stage. This includes the internal and external framework of the house. The walls will be placed according to the final plans. After, the roof, gutters, and insulation of the walls will be installed. 

The framing and brickwork can take one to two months or even longer. The timeline for this stage varies depending on the size of the house, the materials being used, and the weather.

If the roof hasn’t been installed, construction is more susceptible to weather delays. A downpour or other weather disturbances could play a hand in halting construction. When the roof and exterior coverings are in place, it’s much easier for builders to manage weather changes.

About 15% of the construction loan will be released at this stage as the house comes together.  

Stage 3: Lock up 

Once stage two is completed, it’s time for your builders to add the windows and doors, hence the term ‘lock up’. It’s also safe for your tradies, plumbers and electricians to start working on your house. This is when the heating and cooling systems can be installed and fitted for appliances. 

Just before the plaster and bricks are put in, the structure will be inspected by a qualified Building Certifier. This step ensures that the frame, windows, external door frames, and the electrical and plumbing services have been installed correctly. 

The lock up stage of the construction can take one to two months, as well. The timeline may change depending on how complicated the installation of windows, doors, wiring, and plumbing is. At this stage, around 35% of the construction loan will be released. 

Stage 4: Fix 

This phase of the building process is where your house is ‘fixed up’, so to speak. This is when the build looks less like a construction site and more like a functional, liveable home. 

This stage involves installing the fittings in the kitchen, bathroom, and other rooms in the house. The plumbing and electrical works should be completed at this stage. Bathrooms will be waterproofed and tiled at this point. The finishings for carpentry, such as shelves, wardrobes, skits, and the like, will also be done during this time. 

The fix stage usually takes a while, from two to four months or longer. Around 20% of the construction loan will be released at this stage. 

Stage 5: Completion 

The last stage of the building process involves minor fixing and cleaning up, preparing for when you move in. This is when all the painting, flooring, lighting, and window coverings are put in place in the living areas. In the kitchen, the appliances like the refrigerator, dishwasher, and oven will be placed. Meanwhile, in the bathroom, the fittings like the showerheads, sinks, and the like will be installed. 

Final inspections will be made to ensure that everything is working properly. The builders usually do a walkthrough with the homeowner to make sure that everything is in the right place and make minor adjustments if there are any.  

Doing the final touches can take up to two months. At this stage, you get the final 15% of the loan. Once everything is done, you’re handed the keys to your new home and can start moving in! 

How does a construction loan work? 

A construction loan is paid out in stages as the house is built, whereas a regular home loan is a lump sum received at settlement. At each stage, your lender will finance the construction. Your lender arrange an inspection of the house before releasing any funds to see if the money is being used correctly and if the plan and budget are proceeding as planned. 

Construction loans are structured as interest-only loans during the construction period. When the construction of the house is completed, the loan will typically revert to principal and interest repayments unless you have been approved for a longer interest only repayment period. 

If you’d like to know more about construction loans, get in touch with our friendly lending specialists by calling 1300 149 081. Or you can check out our range of construction home loans with competitive rates, awesome features, and much more. 

Ready to apply for a construction home loan? Submit an online application today!  

Ready to start saving on your home loan?

Find out in under 2 minutes if you qualify for one of our low rate home loans.

Do I Qualify?