This young couple had a combined income of $145,000 and wanted to build their first home in Mount Barker, one of Adelaide's fastest-growing areas. They had found a block of land for $240,000 and secured a fixed-price building contract for $390,000 - a total project cost of $630,000.
They had saved a deposit and wanted to keep their borrowing as low as possible. But they had never been through a construction loan process before and were unsure how progress payments worked, what to expect at each stage, or how to handle unexpected costs.
Construction loans are significantly more complex than standard home loans. The loan is drawn in stages as the build progresses - typically at slab, frame, lock-up, fit-out, and completion. Each draw requires an inspection, and the lender needs to approve each payment before funds are released to the builder.
Mid-way through the build, the couple received an $18,000 variation notice from the builder for unexpected site costs - rock removal and additional retaining work required by the sloping block. This was not covered by the fixed-price contract and threatened to blow their budget.
Site costs are one of the most common surprises in new builds. Even with a fixed-price contract, items like rock removal, soil remediation, and retaining walls are often excluded. A good broker will flag this risk before you sign and help you build a contingency into your loan structure.
Jason structured a land and construction loan with CBA, which offered a competitive construction rate and a straightforward progress draw process. He managed all five progress draws during the build, coordinating between the bank's valuer, the builder, and the clients at each stage.
When the $18,000 variation hit, Jason stepped in. He reviewed the variation notice with the couple, helped them negotiate with the builder to reduce the variation to $12,000 by challenging some of the line items, and then adjusted the drawdown schedule with CBA to accommodate the additional cost without requiring a new loan application.
The couple moved into their new Mount Barker home on time and close to budget. The variation was absorbed within the existing loan structure thanks to the contingency buffer Jason had built in from the start. Total final cost was $642,000 - just $12,000 over the original $630,000 budget.
Without Jason's involvement, the $18,000 variation could have caused a much bigger problem - potentially requiring a new loan application mid-build, which can delay construction and add costs. Having a broker who actively manages the construction process made the difference.
When the variation came through we panicked. Jason got on the phone to the builder, went through every line item, and saved us $6,000. Then he sorted the bank side without us having to reapply. We could not have done this without him.
Book a chat with Jason or Steve. We will assess your situation honestly and tell you exactly what is possible.