Links Property Finance · Construction loan mortgage broker, Sydney: Knock-Down Rebuild Loans

Yes, that is the usual structure. Your existing property provides the security, and the lender assesses the completed home's value from the plans and the build contract.

Existing equity in the land frequently means little or no additional cash deposit is required, which is one of the genuine advantages of rebuilding.

The approved facility releases funds at completed construction stages, commonly slab, frame, lockup, fit-off and completion, each after an inspection.

You pay interest only on what has been drawn, so repayments start low and rise as the build advances. The builder is paid from the facility rather than by you directly.

Variations and site costs come from your contingency, which is precisely why it should sit inside the approved facility rather than in a savings account. Applying for additional funds mid-build is possible but assessed hard and slowly, and it happens at the worst possible moment.

Wherever you arrange, and it costs money. You will typically be servicing the loan on a site with no house while paying rent elsewhere, for the duration of the build. It is the cost most rebuild budgets omit, and it belongs in the plan from the beginning.

It depends on the existing house and what you want. Renovating avoids demolition and can sometimes be funded more simply; rebuilding gives you exactly the home you want without the compromises of working around old structure. Compare build cost plus contingency plus holding costs against the renovation alternative before choosing.