Construction home loans

If you’re building or renovating your home, a construction home loan is a feature that is available to help you manage the payments to your builder. It’s available for both our Basic and Offset Home Loans.

Once your new construction home loan has settled, we’ll make progress payments to your builder at each stage of construction.

A one-off construction administration fee of $1,500 applies at settlement, which covers progress inspection costs and progress payments during the construction period.

Please know:

  • Construction loans are not available for owner builders.
  • Payments by cheque or cash are not available.

How it works

  • At settlement, an approved set amount will be held. This amount will be used to make the progress payments to your builder at the completion of each stage of the build, in line with your fixed price building contract.
  • If you’re required to contribute your own funds, this needs to be paid direct to the builder prior to submitting the first Progress Payment request to us.
  • Any changes made to your fixed price building contract that isn’t contributed with your own funds, will need to be reviewed and re-approved by us.
  • Construction must start within three months of settlement and must be completed within 24 months of settlement. We’ll send you a commencement letter at settlement, which you can provide to your builder.
  • When your loan is approved and at settlement, we’ll send you a Construction Pack that includes the following:
    • FAQ’s including a breakdown of each stage and how to request a progress payment.
    • Guidelines for each stage of construction explaining what supporting documents you need to send with each progress payment request.
  • If you have an Offset Home Loan facility, you can have up to 10 offset accounts linked to your construction account. To learn more about offset accounts, see Home Loan Offset Accounts.

Progress payments

  • A progress payment is one lump sum payment made to the builder only at the completion of a stage and reflects the construction progress. Payments to other suppliers cannot be made.
  • The construction feature will be added to the loan account of your choice and progress payments will be drawn from this account.


  • Your repayments are made each month to repay the home loan.
  • Repayments will convert to principal and interest repayments when your interest only period expires.
  • Redraw is available on any additional payments you’ve made above your minimum repayment during the construction period. Funds being held for future progress payments cannot be accessed.


  • A fixed rate isn’t available during the construction period. The account with the construction feature is on a variable interest rate and interest only repayments until your interest only period expires.
  • Subject to credit approval, an interest only period may be available for a 2-5 year period.

Progress inspections

  • A progress inspection is undertaken to verify that the works have been completed in line with the schedule.
  • If the fixed price building contract is above $600,000, we'll require a progress inspection to be made at every stage of the build.
  • If the fixed price building contract is less than $600,000, we'll only require a progress inspection to be made at the first and final stages of the build.
  • Once booked, the progress inspection generally takes 3-5 business days to return the report, depending on the availability of the valuer.

Stages of construction

There are typically five stages of construction. Progress payments will be made at the completion of each of the following stages:

StageMilestonesExample (% of construction costs)
1. Foundations/slab

This is when the deposit is paid to the builder

This is the beginning of your construction when the foundation, or slab, is laid down.

2. FrameThis is when the framework for the house goes up and the windows have been fixed in position.20%
3. Lock-up/external liningThis includes finishing of external walls such as brick work or cladding, the final roof covering and fixing of house doors.30%
4. Fixing/internal liningThis is when most internal works, such as installation of walls, ceilings, bathrooms and kitchen cabinets are completed.20%
5. Practical completionThis is the last stage of construction. Your home is completed and ready to move into.10%

How to request a progress payment

  1. When you receive the invoice from the builder, you’ll need to sign the invoice and authorise the payment. To do this you’ll need to sign with wet-ink and include this note on the invoice – I/we authorise payment of this invoice.
  2. Email the signed and authorised invoice and any supporting documents to Please see table below which outlines supporting documents you may need to include. Please also ensure that the email subject contains the words ‘Progress Payment’, and your application reference number, which can be found in the subject line on your settlement email e.g., APP-123456.

Once we’ve received all required documents, we’ll arrange a progress inspection if needed, and process the payment. You’ll receive a confirmation email once completed.

You’ll need to provide us with documents at certain stages throughout the build. Failure to provide these documents will result in delays processing the payment to the builder. Please see table below of what documents need to be provided and when:

Document(s)What should be includedWhen to provide
Builder’s tax invoice
  • Invoice on builder’s letterhead.
  • Your name/s
  • Site address
  • Description of work completed
  • Builder’s account details for EFT (Electronic Funds Transfer) payment.
  • Signed with a note ‘I/We authorise payment of this invoice.’

First, subsequent, and final progress payments AND for any additional works claims.

Building contract
  • Signed and dated by all parties
  • Current progress payment schedule supplied by the builder
On submission of Loan Application AND first progress payment
Pool contract (if applicable)
  • Signed and dated by all parties

First progress payment

Homeowner’s warranty insurance
  • Mortgagor(s) full name(s).
  • Builder’s full name.
  • Site address.
  • Cover amount that is greater than or equal to the building contract amount.
  • The insurance is current and valid prior to making the first payment
First progress payment

Contract works insurance

  • Builder’s full name.
  • Cover amount that is greater than or equal to the building contract amount.
  • Site address where insurance is a specific property cover.
  • The state where the property is being built if the insurance is an annual policy.
  • The insurance is current and valid prior to making the first payment.

First progress payment

Public liability insurance

  • Builder’s full name. Minimum cover amount greater than or equal to $2 million.
  • Site address where insurance is a specific property cover.
  • The state where the property is being built when the insurance is an annual policy.
  • The insurance is current and valid prior to making the first payment.

First progress payment

Council approved plans

  • To be stamped and certified

First progress payment

Building insurance policy

  • Mortgagor(s) name/s noted as the insured party.
  • Macquarie Bank noted as the interested party.
  • Landlord insurance or home insurance whichever is applicable.

Final progress payment


For pool builds, the following documents need to be provided when request the first progress payment:

  • Pool builder’s tax invoice signed with a note “I/we authorise payment of this invoice”
  • Fully executed pool contract
  • Current and valid homeowner’s warranty insurance
  • Current and valid contract works insurance
  • Current and valid public liability insurance
  • Stamped and certified Council approved plans

First home owner grant

If you qualify for the First Homeowner Grant, the payment will be released after the slab stage is completed.

To confirm if your First Homeowner Grant application has been submitted, please speak with your broker or banking specialist.

Reimbursement for payment already made to the builder

If you’ve already made a payment to the builder, we can reimburse you as long as Macquarie are holding the construction funds for that stage. You’ll need to send us the invoice from the builder and the receipt confirming payment has been made.

You’ll also need to provide the required documents in line with the above document guide.

Making changes during the construction phase

You’ll need to let us know of any changes to the building construction, contract, or plans. Examples of the type of changes we need to know about include: 

  • progress payment schedule
  • post contract variation 
  • council approved plans
  • additional work (increase or decrease in amount allocated for the additional work item)
  • builder failure or new builder engaged
  • change in loan purpose
  • any other changes that may happen throughout the process.

All changes will need to be reviewed and approved by us. Please email the details to with any supporting documents noting the APP number in the email subject line.

Changes to the progress payment schedule

We’ll need to review any changes to the progress payment schedule (PPS). Please email a copy of the new PPS as soon as the changes have been made and any relevant supporting documents. Please send to along with the APP number noted in the email subject line.

Depending on the details of the change, a new valuation may be needed. Please allow up to 10 business days for this to be reviewed.

Changing your builder

Any changes to the builder will need to be reviewed and approved by us. Please email the following documents noting the APP reference in the subject line:

  • new signed building contract
  • new progress payment schedule
  • stamped and certified council approved plans

Once we’ve received these and approved, we'll order a new valuation for the property and you’ll need to email the following documents noting the APP reference in the subject line:

  • current and valid Homeowners’ Warranty Insurance
  • current and valid Contract Works Insurance
  • current and valid Public Liability Insurance

What happens when construction is complete

When the final stage of construction is complete, we’ll deposit any surplus funds from construction back into your loan account which if applicable, will be available for redraw. 

Your repayments will be converted to principal and interest at the end of the interest only term. If you’d like to convert prior to this, please visit our Switching from Interest Only repayments article for more information on how to request this.

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