027 336 3000Building gives you flexibility on deposit and exemption from some LVR rules.
The financing process for a New Build is genuinely different from buying an existing home. Different deposit position, different lender treatment, different drawdown structure, different timing. I’ll walk beside you from start to finish.
Talk to JJSound like you?
New Build clients come in all shapes. The common thread is that they’ve worked out (or are starting to work out) that building unlocks options that buying existing doesn’t.
The first home builder
You’re a first home buyer who’s discovered that New Builds open doors closed to existing-property buyers. Lower deposit thresholds, different LVR treatment, sometimes a turnkey option that feels less daunting than a build from scratch.
The investor with a New Build strategy
You’re building a portfolio and you’ve worked out that New Build investment property sits under different rules than existing investment property. The maths can be meaningfully different. Worth a structured conversation.
The turnkey buyer
You’re buying off-the-plan or completing a turnkey purchase. The contract structure (sunset clauses, progress payments, completion timeline) interacts with your loan in ways that an existing-home purchase doesn’t.
The progress-payment builder
You’re building from scratch with a fixed-price contract and progress payments. The lender’s drawdown schedule, the builder’s payment claims, and your cashflow all need to line up. This is where having someone who’s done it before earns their keep.
What changes when you’re building rather than buying
Same end product (you own a home), very different financing path to get there. Here’s what’s different and why it matters before you sign anything.
Five things that work differently for New Builds
- Deposit position is more favourable. Reserve Bank LVR rules carve out exemptions for New Builds, meaning lenders can often lend at higher loan-to-value ratios than they would for an equivalent existing home. The threshold sits lower than for existing property.
- The lender treats it as a different risk. A brand-new home with a fresh code-compliance certificate is a different proposition to a 1960s villa with deferred maintenance. Lender appetite reflects that.
- Progress payments need a structured drawdown. If you’re building from scratch, the lender doesn’t release the full loan on day one. Funds get drawn down as the build hits milestones. Your loan needs to be set up to handle that without you fronting cash you don’t have.
- The contract structure matters. Fixed-price builds, progress-payment builds, and turnkey purchases all involve different contract terms. Sunset clauses, completion dates, and contingency provisions all have lender implications.
- Timing is its own problem. Pre-approval valid for 90 days doesn’t help if your build won’t be ready for 18 months. Working out which lender will hold the line longest, and how to bridge the gap if needed, is part of the strategy.
LVR settings, deposit thresholds, and lender appetite for New Builds change with the market and Reserve Bank policy. The current settings for your situation are what matter, not the website’s. Get them in our first conversation.
What you get when you work with me
New Build financing has more moving parts than a standard purchase. The work upfront is to set up a structure that fits your build timeline, lender requirements, and cashflow, then to keep it running smoothly all the way through to code-compliance certificate. There’s no cost to you for my advice as I get paid by the lender.
- Deposit and LVR analysis specific to New Build rules
- Lender selection: who’s currently most favourable for New Builds
- Pre-approval timing: matched to your expected build completion
- Drawdown structure for progress-payment builds
- Contract review from a financing perspective (not legal advice)
- Coordination with builder, solicitor, and lender through the build
- Progress claim management as funds get released
- Final loan settlement once code-compliance is issued
- Re-fix and structure conversation once you move in
- Same direct contact for the next loan, refix, or investment
What happens when you reach out
New Build timelines are long. From first chat to keys in hand can be anywhere from 6 months (turnkey) to 18+ months (build from scratch). Here’s how the financing fits around that.
First chat
What you’re building, with whom, and where you are in the process.
Lender match
I find the lender whose New Build appetite, drawdown structure, and timing best fits your build.
Pre-approval
Strategically timed so the approval is current when you actually need it for the build.
Build and drawdowns
I manage the lender side of progress claims as your build hits each milestone.
Settlement
Code-compliance certificate issued, final loan settles, you move in. Then I check in on the structure.
New Build FAQ
Do New Builds really need a smaller deposit than existing homes?
Yes, in most cases. The Reserve Bank’s LVR rules carve out exemptions for New Builds, meaning banks can lend at higher loan-to-value ratios than they would for equivalent existing properties. The exact threshold moves with policy settings, so I’d rather give you the current accurate number in our first chat than quote a figure here that might be out of date by next quarter.
For a first home buyer, this can be the difference between needing to keep saving and being able to start building now.
What’s the difference between a turnkey and a progress-payment build?
A turnkey purchase is essentially buying a finished or nearly-finished home off-the-plan. You sign a contract, pay a deposit, and settle the full balance at completion. From a financing perspective it looks similar to buying an existing home, just delayed.
A progress-payment build is when you’re contracting a builder to construct from scratch on land you own (or are buying). The lender releases funds in stages as construction hits agreed milestones. The drawdown schedule, the builder’s payment claims, and your cashflow all need to line up.
How do progress payments actually work?
Your build contract specifies stages (foundation, framing, roof on, lock-up, fit-out, completion). At each stage, the builder issues a payment claim. The lender (after appropriate checks, often a quantity surveyor sign-off) releases funds for that stage.
You typically only pay interest on the drawn-down balance, not the full loan, while the build is in progress. The full loan converts to standard repayments once the code-compliance certificate is issued.
What happens if my pre-approval expires before the build is finished?
It happens regularly. Pre-approvals usually have a 3 to 6 month validity window, but builds can take 12 to 18 months or longer. Part of the strategy is choosing a lender who’ll hold their approval through your build timeline, or who has clear renewal terms.
Where renewal isn’t clean, we plan for it: keeping documentation current, monitoring serviceability against any rule changes, and re-engaging the lender well ahead of expiry. Worth thinking about before you sign the build contract, not after.
Can I use my KiwiSaver for a New Build?
Yes, in most cases. KiwiSaver first home withdrawal applies to New Builds the same way it applies to existing homes. The withdrawal goes through your KiwiSaver provider and the timing needs to fit the lender’s drawdown requirements, but the eligibility is the same.
What if the builder goes under partway through the build?
This is one of the genuine risks of building rather than buying. Mitigations include: choosing a builder with good financial standing, requiring a fixed-price contract with appropriate guarantees (Master Builders, Certified Builders), and ensuring the build contract has clear provisions for completion in the event of builder insolvency.
The lender side has implications too: a stalled build complicates the loan structure. Worth talking through what happens at each milestone before you sign anything.
I want to build investment property, not a home. Same rules?
Different rules, but New Builds also have favourable treatment for investment compared to existing investment property. Both deposit thresholds and (depending on current settings) interest deductibility can sit differently for New Build investment than for existing investment.
This is one of the strongest arguments for building rather than buying when you’re growing a portfolio. Worth a structured conversation that takes your full position into account.
Thinking about building instead of buying?
30 minutes will tell you what’s possible, what to watch for, and which lender suits your build. No cost, no pressure, no obligation.
Talk to JJOr call 027 336 3000