House and land package finance: land settlement, the build and repayments

Last updated 6 November 2026 · Reviewed by 360 MMS Compliance

How does a house and land package work?

With a house and land package, you buy a block of land and sign a building contract for a new home on it, often with a builder the developer works with. Most packages use split contracts:

• The land contract: you buy the land from the developer or owner, and pay for it at land settlement.
• The building contract: you sign a fixed-price contract with the builder, who is paid in stages as the home is built.

Split contracts usually mean stamp duty is charged on the land rather than the finished home. Stamp duty rules differ between states and territories, so confirm the position with your conveyancer or the state revenue office.

What happens at land settlement?

Land settlement is when you pay for the land and become its owner. Your loan funds the land purchase, along with your deposit. If the land is in a new estate, settlement may not happen until the title for your block is registered, which can take a while. If there's a long wait, ask your broker how long your loan approval lasts and what happens if your circumstances change in the meantime.

After land settlement, the building contract starts and the build moves to progress payments.

How do progress payments work during the build?

Your building contract sets out the stages of the build and how much is paid at each one. Common stages are base or slab, frame, lock-up, fixing and practical completion. When a stage is reached, the builder issues an invoice and that payment is released from your loan. Because funds are drawn in stages, your loan balance grows over the build and reaches the full amount at completion. Construction loans are for fixed-price contracts with a builder; owner-builder construction isn't offered.

Can I pause repayments during the land and build period?

On some house and land options with an approved builder, yes. Other fixed-price builder contracts can be considered under other construction lending, without the pause. Where a pause is available, you may be able to stop repayments for a period while the land is bought and the home is built. This can help with cash flow, for example if you're still paying rent while you wait for the home.

Here's the trade-off. Interest is still charged during the pause and is capitalised, which means it's added to your loan. Your balance is higher when repayments start, and you pay more interest over the life of the loan than if you'd made repayments throughout. Your broker can explain what a pause would add to your loan.

If you'd rather not pause, interest-only repayments during construction may be available on some loans, rising as each stage is drawn.

How much deposit do I need for a house and land package?

It depends on the loan, the loan amount, the property and whether you'll live in the home or rent it out. In general, a smaller deposit means borrowing a bigger share of the property's value, and that usually brings extra cost:

• Lenders mortgage insurance (LMI): insurance that protects the lender, not you, and which you pay for.
• A lender risk fee: on some loans, a risk fee applies instead of LMI. You pay one or the other, never both, and on some loans it can be added to the loan.

You'll also need to allow for purchase costs such as stamp duty and fees. Your broker will assess your income and financial situation, explain whether LMI or a risk fee applies, and confirm the deposit for your scenario.

What are the pros and cons of house and land package finance?

Possible pros:

• The builder is paid in stages, and interest is charged on what has been drawn.
• Split contracts usually mean stamp duty is charged on the land, not the finished home.
• On some options with an approved builder, a repayment pause can ease cash flow while you wait for the home.

Possible cons:

• A pause adds interest to the loan, so you pay more over the life of the loan.
• Land settlement in a new estate can be delayed until the title is registered.
• Building delays or contract variations can add time and cost.
• Two contracts and a series of progress payments take more effort than buying an established home.

How do I apply, step by step?

1. Talk to your broker or our team. Share the package, the builder and whether you'll live in the home.
2. Gather your documents. The land contract, the fixed-price building contract and the documents your broker asks for about your income and finances.
3. The assessment. Your broker will assess your income and financial situation, and the application is assessed against lending criteria, including a valuation.
4. The offer. If the application is approved, you receive a loan offer and loan documents, including any repayment pause, to read and sign.
5. Land settlement. The loan and your deposit pay for the land.
6. The build. The builder is paid in progress payments until completion, and your repayments start or continue as your loan sets out.

How can 360 MMS help?

360 MMS is a mortgage manager. Its home and commercial loans are funded by wholesale institutional funders and arranged through accredited mortgage brokers or directly. For a house and land package, we can help with:

• House and land finance: with an approved builder, for buying, not for refinancing an existing loan.
• A repayment pause: on some options, with the extra interest explained before you decide.
• Construction lending: other fixed-price builder contracts, with progress payments at each build stage.
• Investors: investors can buy a house and land package too, and some options let them pause repayments during construction, with the same extra interest cost.
• LMI or a lender risk fee: your broker explains which applies to your loan.
• Getting started: apply through an accredited broker, or contact our team directly.

FAQs

Sources and further reading:Moneysmart: Construction loan · Moneysmart: Lenders mortgage insurance (LMI) · Moneysmart: Buying a house

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. All loans are subject to lending criteria, and fees and charges apply. Kuone Pty Ltd T/As 360 MMS (ABN 81 621 683 672), Australian Credit Licence 504193.