Owner Builder Loan

An Owner Builder is someone who wishes to build a property without using a Registered Builder. That is, they are looking at completing the building project & they will manage or they will use a project manager to construct. To complete the project, the client may require finance for this build & this can be quite complex for those that are inexperienced. Owner builder loan for home owners are often a top choice when it comes to financing.

The benefits of being an owner-builder is that the project can be built at a cost that is less than what a builder may charge, so this enables the client to have equity in their property. Many owner-builders may be tradesman that will use their trade on the build or just may have project management skills that can organise a building job.

When applying for an owner builder loan, banks are looking for detail. They will require the job to have quotes for all trades & products. The other requirement by the bank is for the client to have funds to cover 20% of the build cost & a further 20% of the build cost to cover contingency for any over-run in the build cost. The bank wants to avoid the client running out of funds with a build that requires further funds to complete.

Once the loan has been approved & the project starts the client will use their funds for the build & then the bank will reimburse for each stage of construction.

The biggest factor owner-builders need to take into consideration is time. The longer the build takes the more money this costs. Clients need a strong budget & work to a strict time-frame, if they can’t then they simply won’t enjoy the benefits of why they started in the first place & that is to save money.


*Paul Blake is a Mortgage Broker with Citiwide Homeloans, he has over 20yrs lending experience & has helped many owner builder clients with their finance requirements.  If you wish to discuss your lending requirements don’t hesitate to contact Paul on 1300 345 747

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