A construction loan pays out in stages, not as one lump sum, and you need to know how each stage works before you sign. For a bricklayer building a home, that means understanding when money leaves the loan, who gets it, and what you owe in the meantime.
You already know how a build runs, so this is about the money side. Get it wrong and you end up with delayed payments, a stalled site and interest ticking over.
What Is a Construction Loan Draw Schedule?
A construction draw schedule is the list of build stages at which your lender releases part of the loan to your builder. Each release is called a progress payment or drawdown, and it is tied to work that has actually been completed.
Common stages include the deposit, base, frame, lock-up, fixing and completion. Your brickwork usually sits between frame and lock-up, so that is the stage where the builder will claim a bigger slice of the loan. The exact stages and percentages come from your building contract, and each lender sets its own rules on how many drawdowns it allows and what inspections it needs.
Before you commit, check that the lender's drawdown stages line up with your contract's stages. A mismatch means a claim can sit unpaid while everyone sorts out the paperwork.
How Interest Works During the Build
During a build, you are generally charged interest only on the amount drawn down so far, not on the full approved loan. That keeps early repayments low, and they rise as more of the loan is released.
NSW Government guidance says a borrower financing a project home starts mortgage repayments once the first progress payment is made and the loan begins to draw down. Whether you pay interest-only during the build, and for how long, is set by your lender. Ask for this in writing.
The trade-off is that interest-only repayments do not reduce what you owe. Once the build ends, your loan usually moves to principal and interest, and repayments step up. You can read more about how this works on our interest only loans for tradies page.
Example: How Repayments Climb Across a Build
As an illustrative example, take a bricklayer building a home with a $600,000 construction loan at 6.75% p.a. Interest-only repayments are about 1/12 of the yearly interest on the drawn balance.
After the deposit and base stage, say $120,000 is drawn. Interest on that is $120,000 x 6.75% = $8,100 a year, or about $675 a month. After frame and lock-up, say $420,000 is drawn. Interest is $28,350 a year, or about $2,363 a month. At completion, with the full $600,000 drawn, interest is $40,500 a year, or about $3,375 a month.
The outcome is that the monthly cost roughly quintuples from the first stage to the last. If this bricklayer budgeted only for the early figure, the final stages would hurt. Budgeting for the full-loan interest figure from day one avoids that shock, and it leaves room if the build runs long. The 6.75% rate is an example only. Your actual rate depends on your deposit, lender and loan type. Use a borrowing calculator to test your own numbers.
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Do Progress Payments Have Legal Limits?
Mostly, but it depends on where you build. Most states and the NT limit deposits and require progress payments to relate to work done, but the ACT has no statutory deposit cap, so check your own jurisdiction's rules.
In NSW, the maximum deposit is 10 per cent, and progress payments must match work carried out. In Queensland, it is 5 per cent for contracts of $20,000 or more, and a builder cannot claim more than 50 per cent of the contract price until at least half the on-site work is complete. In WA, the deposit is limited to 6.5 per cent for contracts from $7,500 to $500,000. In Victoria, under current rules, the deposit is capped at 5 per cent for contracts of $20,000 or more, and payments follow completed stages.
There is a practical catch. Consumer Affairs Victoria warns that insurance may not cover work paid for before it is completed. Paying early can leave you exposed if the builder fails. Check your own state's rules with the relevant building regulator before signing.
Who Checks the Work Before the Lender Pays?
Lenders usually want evidence the stage is done before releasing funds, which often means a progress inspection. The details depend on the lender.
Building Commission NSW gives $250 to $500 as an indicative cost for each independent progress inspection. Whether the lender arranges and charges for its own inspection varies, so ask about the fee before you apply. Ask your lender about any fees that apply to each drawdown.
If you are building as a bricklayer owner-builder or managing trades yourself, the lender may want more paperwork at each stage. Plumbers, electricians and other trades still need paying on time, so a slow inspection can hold up the whole site. Book inspections early, and keep your claims in line with the contract.
Example: Fixing a Mismatched Draw Schedule
Consider a bricklayer who signs a building contract with a frame stage payment, then finds the lender's schedule only releases funds at lock-up. The gap is a real problem: the builder wants paying at frame, and the loan does not move until later.
The fix is to raise this at the loan application stage, not after signing. A broker can compare lenders and match one whose drawdown stages suit the contract, or the contract can be adjusted before it is signed. In this scenario, the bricklayer asks for the lender's schedule up front, finds a lender whose stages fit, and the frame claim is paid when it falls due. The outcome is no stalled site and no scramble for cash to cover the builder.
That comparison is where a broker earns their keep. Our construction loans for tradies page explains what we look at.
Can Your Income as a Bricklayer Affect Approval?
Yes. Lenders assess whether you can afford repayments, and the way your income is made up matters, especially if you are self-employed or rely on overtime.
APRA requires banks to test your ability to repay at a rate at least 3 percentage points above the loan rate. A prudent bank also applies discounts of at least 20 per cent to less stable income such as bonuses or overtime. If you are a sole trader, see how lenders view self employed loans for tradies, and check where you stand with our borrowing capacity page.
Finance for building a new dwelling is exempt from APRA's debt-to-income limit, but that does not remove the affordability assessment. Non-bank lenders are not bound by APRA's rules, so their policies can differ.
Why Work With a Broker on a Construction Loan?
A broker can compare lenders on the details that matter for a build, such as drawdown stages, inspection requirements, fees and repayment type during construction. These vary a lot between lenders, and none of them is set by government.
The trade-off is that you need to give a broker accurate details about your income, contract and build timeline so the lender comparison is sound. See our wider range of finance for tradies and home loans for tradies or read about home loans for bricklayers specifically.
Call one of our team or book an appointment at a time that works for you, and we will match your building contract to a lender whose draw schedule fits before you sign.
Frequently Asked Questions
Do you pay interest on the full construction loan from day one?
Generally no. You are usually charged interest only on the amount drawn down so far. Repayments rise as more of the loan is released, so budget for the full-loan figure.
What is a construction draw schedule?
It is the list of build stages at which your lender releases part of the loan to your builder. Each payment is tied to completed work, and the stages come from your building contract and lender rules.
Are there limits on deposits and progress payments?
Most states and the NT do, but not the ACT, which has no statutory deposit limit. For example, the NSW maximum deposit is 10 per cent and the Queensland maximum is 5 per cent for contracts of $20,000 or more.
Does a lender inspect the build before paying?
Often, yes. Many lenders want evidence a stage is complete before releasing funds. Ask your lender who arranges the inspection and what it costs.
