Prestige
Knockdown and rebuild on the Gold Coast: how the finance works
7 min read · By Daniel Lagden · 6 November 2026
The short version
- A rebuild is usually financed as a construction loan, with money released in stages as the builder completes work.
- Lenders typically want a fixed price contract, approvals and plans before they commit.
- Your cash contribution depends on the lower of total cost and completed value, so the land and the build both count.
- Rent during the build, contingency and fees outside the contract are the costs people forget.
A knockdown and rebuild looks like one project, but a lender sees two: buying land with an old house on it, then building a new one. The finance reflects that. This guide explains how the loan works, how to estimate the cash you need and what to line up before you buy.
Quick summary: expect a construction loan with staged payments, a fixed price contract and a cash contribution based on the lower of total cost and completed value. Budget for rent and a contingency.
Why it is not a normal home loan
A standard home loan assumes the house exists. A rebuild does not, so most lenders use a construction loan. Money is released in stages as the builder completes work, and you usually pay interest only on what has been drawn. Many lenders then move the loan to principal and interest once the build is finished.
The stages
- You settle on the land and the old house.
- The old house is demolished and the site is cleared. This cost often sits outside the building contract, so check.
- The builder starts, and the lender releases funds at set stages, such as deposit, base, frame, enclosed (also called lock up), fixing and practical completion.
- A valuer or inspector usually checks progress before each payment.
What lenders want before they approve
- A fixed price building contract with a builder licensed by the Queensland Building and Construction Commission (QBCC).
- Council and building approvals, or evidence they are on the way.
- Plans and specifications, which a valuer uses to estimate the finished value.
- A Queensland Home Warranty Scheme certificate from the QBCC, which your builder arranges, with the premium included in the contract price.
- Your income and your ability to pay the repayments, including during the build.
How much cash will you need
Lenders vary on how they work it out, but a common approach is to lend a percentage of the lower of the total cost and the value of the finished home. Say you buy the old house for $1,600,000, spend $40,000 on demolition and sign a $1,400,000 fixed price contract. The table assumes the finished home would be worth $3,400,000 and the lender lends up to 80 per cent.
| Item | Amount |
|---|---|
| Land and old house | $1,600,000 |
| Demolition | $40,000 |
| Fixed price build | $1,400,000 |
| Total cost | $3,040,000 |
| Assumed value when finished | $3,400,000 |
| Maximum loan at 80 per cent of the lower figure (total cost) | $2,432,000 |
| Cash you need | $608,000 |
That $608,000 is before transfer duty, legal fees, lender fees, rent and a contingency. Some lenders do not count demolition outside the building contract, which would lift the cash you need to about $640,000. Your share is usually needed up front: at land settlement, and again before the first progress payment is released. If you already own the land, its value usually counts towards your share, which can cut the cash you need. The 80 per cent limit and the finished value are assumptions, and lenders and valuers choose their own.
Gold Coast checks before you buy
Before you commit to a site, check which City of Gold Coast planning overlays apply to it, such as flood or coastal hazard areas, and whether any heritage or character rules affect demolition. Low lying and canal lots can also have soil and drainage issues, which a builder's site investigation should pick up. These checks can change what you can build and what it costs, and a lender will want the approvals to match.
Costs people forget
- Rent or holding costs while the home is being built, which can run from several months to a year or more.
- A contingency for variations and delays.
- Council and utility connection fees.
- Landscaping, driveways, fencing and window coverings, which are not always in the contract.
- Interest during construction.
- Valuation or inspection fees for progress payments.
Repayments change as you draw
Many construction loans are interest only while you build. Repayments rise as more is drawn, and again when the loan switches to principal and interest. Ask what they will be at each stage, and whether you can afford them alongside the rent.
Renovate or rebuild?
A substantial renovation can also be construction lending. The deciding factors are the cost, the condition of the house and what the finished home will be worth. Ask us to run both before you commit.
- Construction loans: staged payments explained
- Prestige home loans on the Gold Coast
- Bridging finance: buying before you sell
Before you buy: a checklist
- Get a builder's price before you commit to the land, not after.
- Ask your conveyancer or solicitor to check the title and any restrictions on the site.
- Check that council approval is realistic for what you want to build.
- Work out cash needed using the lower of total cost and completed value.
- Budget for rent and a contingency.
- Get a pre approval that covers both the land and the build.
General information only, current as at November 2026. Construction policy, valuations and builders' prices vary. The figures here are illustrative, not a market benchmark or a quote.
Run the numbers
Frequently asked questions
Can I get a loan to knock down and rebuild?
In many cases it is possible. It usually works as a construction loan with staged payments, assessed on the lower of the total cost and the value of the finished home.
Do I need a fixed price contract?
Most lenders want one, or a detailed costed contract, with a licensed builder. Policies vary, so ask the lender early.
Can I live in the house during the rebuild?
Not once it is demolished, so plan for rent or a second property. Lenders do not usually fund this, so include it in your budget.
What if the build costs more than the contract?
Variations and delays can add cost, and the lender will not necessarily lend more. Keep a contingency.
Does the land count as my deposit?
If you already own it, its value usually counts towards your contribution. We check how each lender treats it.
Thinking about a knockdown and rebuild?
Send us the address, the builder's price and your plans. We will work out the cash you need and how a lender is likely to treat it, before you buy.
Plan my rebuild financeGeneral information only. This article does not take into account your objectives, financial situation or needs, and is not credit assistance or financial advice.
