Finance guide
Construction loans
Money released in stages against progress, which changes how you plan the build.
The short version
If you read nothing else.
- Funds are released in tranches against verified progress, not in one payment.
- You pay interest only on what has been drawn until the final tranche.
- Approved building plans are required before the first release.
- Cost overruns are yours. Lenders sanction against an estimate and rarely top up.
How the tranches work
A typical schedule releases at foundation, plinth, roof slab and completion. An engineer from the lender inspects before each release, which means a delay in inspection is a delay in payment — worth knowing before you agree a schedule with a contractor who expects to be paid on time.
The overrun problem
Lenders sanction against an estimate prepared at the start. Construction costs move, and the gap is funded by you. Building in a 15–20% contingency to your own planning is the difference between finishing and stopping halfway.
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