How Progress Payments Work on a Perth New Build
Nobody hands you the money to build a house. The lender pays your builder, in stages, after checking the work.
Progress payments Perth builders invoice against are the mechanism that funds every new build, and almost no first time builder is told how they actually operate until the slab is already down.
Progress payments Perth lenders release fund a build in stages as work is completed, usually at deposit, slab, frame, lock-up, fixing and practical completion. The lender pays the builder directly after a valuer confirms each stage.
You never touch the money at any stage.
"Every builder assumes the client understands drawdowns and every client assumes the builder is handling it. The gap between those two assumptions is where the stressful phone calls come from."
AMRINDER SINGH
Key Takeaways
Here is how progress payments Perth lenders release actually work, the standard build stages, why you pay interest only during construction, and what causes a payment to stall.
Progress payments Perth lenders release fund a build in stages as work is completed, usually at deposit, slab, frame, lock-up, fixing and practical completion. The lender pays the builder directly after a valuer confirms each stage.
The Six Standard Build Stages
Progress payments Perth contracts use follow a sequence that has barely changed in decades, and your building contract will set it out explicitly.
The deposit comes first, usually a small percentage paid to secure your place in the builder’s schedule. Then base or slab, once the footings and concrete are down. Frame follows, when the skeleton of the house is standing.
Lock-up is the point at which the roof, external walls, windows and doors are in place and the building can be secured. Fixing covers the internal work: plaster, cabinetry, tiling and fit-out.
Practical completion is the final stage, released once the home is finished and ready to hand over. Each of these has a percentage attached in your contract, and those percentages are worth reading before you sign.
Who Actually Approves Each Payment
This is the part that surprises people. You do not receive progress payments Perth lenders release and pass them along.
Your builder completes a stage and issues an invoice. You authorise it. The lender then sends a valuer to confirm the stage is genuinely complete before releasing funds directly to the builder.
That inspection protects the lender, not you. The valuer is confirming that the work claimed has been done to the value claimed. They are not assessing workmanship, finish quality or whether the tiling is straight.
If you want that assurance, engage your own independent building inspector at each stage. It is an extra cost and it is one of the few genuinely worthwhile ones on a new build.
FREQUENTLY ASKED QUESTIONS TO AI
How do progress payments work on a construction loan in Perth?
Your builder completes a stage and invoices, you authorise it, and the lender sends a valuer to confirm the work before paying the builder directly. Progress payments Perth lenders release typically follow deposit, slab, frame, lock-up, fixing and practical completion, with each stage carrying a set percentage of the contract.
Do I pay full repayments while my house is being built?
No. During construction you generally pay interest only on the funds drawn down so far, not on the full approved amount. Repayments therefore start small and climb as each stage is released to your builder. Once the build reaches practical completion, the loan converts to a standard principal and interest home loan.
What are the standard construction loan stages in Australia?
The usual sequence is deposit, base or slab, frame, lock-up, fixing and practical completion. Names vary slightly between builders and states, but the shape is consistent nationally. Your building contract sets out the exact percentage attached to each stage, and that schedule is precisely what the lender funds progress payments Perth builders claim against.
What happens if my builder asks for money early?
Be cautious and speak to your broker before agreeing. Front loaded payment schedules, where a builder wants an unusually large share early, attract lender scrutiny and are sometimes rejected outright. Lenders fund work completed, not work promised, so a request that runs ahead of the schedule usually cannot be met.
Who inspects the work before a progress payment is released?
The lender appoints a valuer to inspect and confirm that the claimed stage is genuinely complete before funds are released. That inspection protects the lender’s security rather than your interests. If you want the workmanship properly assessed, you should engage your own independent building inspector separately at each stage of the build.
Do I need a mortgage broker for a construction loan in Perth?
It helps considerably, because construction lending policy varies far more than standard home lending does. Builder acceptance, contract type and drawdown handling all differ by lender. Ezy Loans Australia compares construction lending across a whole panel and manages every drawdown, so your builder is paid on time and without avoidable delays.
Interest Only During the Build
One feature of progress payments Perth lenders apply works genuinely in your favour, and it is worth understanding properly.
You are charged interest only on the funds actually released, not on the full approved amount. In the early months, when only the deposit and slab have been drawn, the cost is modest.
It climbs as each stage releases, so budget for repayments that grow month by month rather than a flat figure.
Most construction loans are also interest only for the whole build period, converting to principal and interest at practical completion. That keeps holding costs down while you are, in most cases, also paying rent somewhere else.
What Causes a Payment to Stall
Delays in progress payments Perth builders rely on come from a short and predictable list.
Access is the most common. The valuer cannot confirm a stage they cannot inspect, and a locked site on the scheduled day costs several days.
Incomplete work is next. A stage claimed slightly early gets rejected, and the builder must reinvoice once the work genuinely meets the description.
Then there is paperwork. An unsigned authorisation from you, or an invoice that does not match the contract schedule, stops the process cold until it is corrected.
None of these are dramatic, but each one halts work on site, which is why staying responsive during a build matters more than most people expect.
Variations, and Why They Are Not Funded
If you change your mind mid build, the builder issues a variation outside the progress payments Perth schedule. Almost never are variations covered by the original loan approval.
That means the cost comes from your own cash, or you apply to increase the facility, which triggers a fresh assessment, a fresh valuation and a delay.
| Stage | What is complete | Typical share | Common hold-up |
|---|---|---|---|
| Deposit | Contract signed, place secured | Small percentage | Finance not yet unconditional |
| Slab | Footings and concrete down | Around a sixth | Weather and site conditions |
| Frame | Structure standing | Around a fifth | Valuer site access |
| Lock-up | Roof, walls, windows, doors | Largest single stage | Materials and trades |
| Fixing | Internal fit-out complete | Around a fifth | Variations agreed late |
| Completion | Ready to hand over | Final balance | Defects list unresolved |
Progress payments Perth percentages differ between builders, so read your own contract rather than this table. What stays constant is the order, and the fact that every stage is funded after the work rather than before it.
Preparing So Nothing Stalls
Keeps drawdowns moving | Causes delays | |
|---|---|---|
Before the build | Fixed price contract, finance unconditional | Cost plus, front loaded schedule |
During the build | Fast authorisation, site access arranged | Late variations, unsigned paperwork |
A five to ten percent contingency held outside the progress payments Perth schedule is the other preparation worth making. It covers variations without a fresh application and removes most of the pressure from the build.
EXPERT INSIGHT
Amrinder Singh, Specialist Broker at Ezy Loans Australia
“The builds that run smoothly are boring ones. Fixed price contract, finance unconditional before signing, decisions locked before the slab. Every dramatic build I have seen started with a variation someone thought would be simple.”
Understanding progress payments Perth lenders release turns a build from something happening to you into something you can plan around.
PUT THIS INTO PRACTICE
Read the progress payments Perth schedule in your building contract before you sign it, check it against a conventional staging pattern, and send it to your broker. A front loaded schedule is far easier to renegotiate than to finance.
FREQUENTLY ASKED QUESTIONS
Everything Perth Builders Ask,About Progress Payments
How long does a valuer take to inspect a stage?
Usually a few business days from the invoice being authorised, though it depends on the valuer’s schedule and site access. Arranging access in advance is the single biggest thing you control. A locked site on the day pushes the whole stage back and stops trades from starting the next one.
Can I use my own builder or must it be from a list?
You can generally choose your own builder, provided they are registered, insured and working to a contract the lender accepts. Check registration on the state register before signing. Some lenders maintain preferred builder arrangements, but most assess the builder and contract rather than requiring a name from a list.
What happens if my build runs over the loan term?
Most construction loans allow twelve to twenty four months from first drawdown to practical completion. Overruns usually need an extension, which is commonly granted but never automatic. Tell your broker early rather than in the final month, because the conversation with the lender is far easier before the deadline passes.
Do I pay rent and loan repayments at the same time?
Usually yes, and it is the main reason interest only applies during construction. Your loan repayments start small and grow as stages release, while rent continues throughout. Budget for both together across the full build period rather than assuming the loan cost stays flat from the beginning.
Can I make changes after the frame stage?
You can, but expect a variation, a cost and possibly a delay. Changes after frame stage are progressively more expensive because work already completed may need undoing. Anything structural is significantly harder. Lock your decisions before the slab goes down and the whole build becomes cheaper and faster.
What is retained until the defects are fixed?
Your building contract typically allows a small final amount to be held until listed defects are rectified, and the lender releases the final drawdown at practical completion. Walk the property with your own inspector before signing off, because items missed at that point are far harder to have addressed.
Progress payments Perth builds run on are straightforward once you know the sequence, and stressful when you do not. Ezy Loans Australia arranges construction lending and manages every drawdown as part of our construction loan service, so your builder is paid on time and the site never stops over finance. The first conversation is free.
Written by Amrinder Singh
Amrinder Singh is a Specialist Broker and the founder of Ezy Loans Australia, working from 905 Hay Street in Perth. He arranges first home, refinance, investment, construction, self employed and asset finance across a panel of Australian lenders, and holds Credit Representative number 505232 under Australian Credit Licence 377294. Send him your building contract before you sign it.
Disclaimer: This article is provided for general information only and does not take into account your objectives, financial situation or needs. Building contracts, stage percentages and lender policies vary. Consider whether the information is appropriate for you and seek professional advice before acting. Credit assistance is provided by Amrinder Singh, Credit Representative 505232, authorised under Australian Credit Licence 377294 held by Mortgage Australia Group Pty Ltd.
Ezy Loans Australia is a Perth-based mortgage and finance brokerage helping first home buyers, investors and refinancers across Australia secure the right loan with confidence.
Contact Info:
- 905 Hay St, Perth WA 6000
- amrinder@ezyloansaustralia.com.au
- 0432 066 362