House & Land Package Finance

A house and land package is one of the more appealing ways to buy a new home in Australia. You get a fixed price package, a brand-new build, and in many cases, a turnkey solution where everything is included and ready to move into. It sounds straightforward. And it can be, with the right finance structure behind it.

At Zella Money, we work with people who are drawn to the idea of a new home package but are not entirely sure how the finance side fits together. That is completely normal. The way a house and land package is financed is genuinely different from buying an established property, and understanding those differences matters.

How the finance actually works

With a standard house and land package, you are typically dealing with two separate contracts: one with the house land developer for the land, and one with the house land builder for the construction. This means your finance is structured differently from a typical home purchase.

The land component usually settles first, which is when your initial loan amount is drawn down. The construction loan then kicks in for the build, with funds released in stages as the build progresses. This is called a progress draw structure, and it means you generally only pay interest on what has been drawn down at any given time, rather than the full loan amount from day one.

If you are looking at a turnkey home, the structure can be simpler. With a true turnkey solution, everything is included in a single fixed price and the loan settles once the property is complete. It functions more like buying an established home, which some people find easier to manage.

Fixed rate or variable, and why it matters here

One of the questions we get asked a lot at Zella Money is whether to go with a fixed interest rate or a variable interest rate on a construction loan. There is no single right answer, and we would never pretend otherwise. What we can do is walk you through the trade-offs based on your situation.

A fixed interest rate gives you certainty over your repayments during the build period, which some people find reassuring when they are also managing rent or other costs. A variable interest rate offers more flexibility, particularly if you want to make additional repayments or if rates shift in your favour. The right choice depends on your timeline, your cash flow, and how you feel about uncertainty. That is a conversation worth having properly.

Deposits, LVR, and what lenders look at

Your loan to value ratio, or LVR, plays a significant role in how lenders assess a house and land package application. Most lenders calculate LVR based on the combined value of the land and the completed build, not just the land purchase price. This can work in your favour, but it also means the valuation process is a little more involved.

The house land deposit required can vary depending on the lender and the structure of the deal. Some lenders are more comfortable with this type of lending than others, which is one of the reasons working with a broker who can access home loan options from banks and lenders across Australia makes a real difference. At Zella Money, we are not limited to one lender's appetite. We look across the market to find a structure that suits your circumstances.

If you are a first home buyer, it is also worth knowing that house and land packages can be eligible for the First Home Owner Grant, often referred to as the FHOG. Eligibility conditions apply and vary by state, so we always recommend getting clear on what applies to your situation before you sign a house land contract.

Stamp duty and what changes with a new build

One of the genuine advantages of a house and land package is the potential stamp duty saving. In many states, house land stamp duty is calculated only on the land value at the time of purchase, rather than the full completed value of the property. This can represent a meaningful saving compared to buying an established home at the same price point. The rules differ across states and territories, so it is worth understanding what applies where you are buying.

What Zella Money does in this process

Our role is to help you understand your construction loan options, structure your finance correctly across both the land and build phases, and make sure nothing falls through the cracks between the house land developer, the house land builder, and your lender. House and land finance has more moving parts than a standard purchase, and the timing of house land settlement matters more than most people realise.

We work with first home buyers who are using a house and land package as their entry point into the market, as well as people who are buying a home to upsize or invest. Whatever your situation, we take the time to understand it properly before we recommend anything.

If you are considering a new build or a project home package and want to understand how the finance side works before you commit to anything, we are here for that conversation. No pressure, no jargon, just a clear picture of what is involved and what your options could look like.