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How to pay for your new home build

Deconstructing construction loans

Thinking about building a new home in Auckland?

Building your own home is an exciting and rewarding experience. Unfortunately for most of us though, we don’t have the sort of money it takes to build a new home lying under the mattress.  The majority of us will need to take out a mortgage to build.

At DBS Residential, we provide a full design and build and project management service. We can be involved from the start, making the building process smoother and more efficient. We can even help you with budgets and guide you through the process of obtaining a construction loan.

There are several different types of construction loans available, and it’s important to choose the right one for your specific circumstances. Not all construction loans are built the same way, as the building process for each home can differ.

For more information, contact us on 09-801 8020. 

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Home and land package

If you’re purchasing a home and land package, you can get separate loans for the land and the house. However, banks will usually bundle them together.

You make payments in stages as construction progresses, with your mortgage increasing and interest payments growing as your new home takes shape.

Turnkey build

If you’re purchasing a turnkey home package, the developer or builder organises everything. The price includes the cost of the land and your new home. A deposit of 10% is required before the build starts. However, you do not have to make any progress payments during the course of the build. Your mortgage payments will start after you move in, so you don’t pay any interest on your loan until your new home is complete.

Managing a new home build yourself

You normally need a standard mortgage to buy the land and then a second construction loan for building the house.

Rather than receiving all the money as a single lump sum, funds are paid out in instalments as the home is being built. Each instalment corresponds to a different phase of the construction process and is based on valuations, invoices and quotes. You’ll typically make interest-only payments during construction and then start making full payments on the principal and interest once the build is complete.

Before banks provide a construction loan, they will need to know how much building your home is going to cost. You will also need a lawyer to advise you on the clauses in the building contract.

The bank will place a condition that a registered valuer assesses the value of your house before the construction, at fixed stages of construction and then again after construction is complete. This is to ensure that funds released by the bank do not exceed more than 90% of the value of the house at any stage.

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Start building your dream home! 

At DBS Residential, we’re here to help you every step of the way. From selecting the right loan to managing the construction process and handing you the key and bottle of bubbles on move-in day, we’ll be there.

We work alongside clients to help them create the homes and lifestyles they have envisioned. We help bring their designs to life, work tirelessly to keep the cost of building down and make sure their homes fit within their brief and within their budget.

Fixed price builders for Auckland

Get a complete start-to-finish new home built by reliable, reputable professionals. The DBS team can build your new home under a fixed-price building contract. You’ll be able to move in without any dramas, loose ends or unwanted financial surprises. Before we begin construction, you and our project manager will agree on the total cost of the building based on your plans and the site.

An initial proposal will be sent from our quantity surveyor, outlining our costs and your scope of work to then provide you with a full comprehensive overall cost breakdown for your project. This proposal will contain a cover letter, trade summary and Excel spreadsheet with each stage of the project outlined. When choosing to build with us we will in good faith refund your initial cost with our quantity surveyor.

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Or Call 021 550 142

Call Dan Hendy on 021-550 142 to find out more about our building and project management services. You can arrange for an obligation-free consult about your new home today.


If you’re planning on building a new home and you’re looking for proven Auckland home builders, cal021 550 142 to speak to the DBS Residential team.