A property development loan funds the construction of a residential or commercial development, secured against the project. Rather than receiving the full amount upfront, funds are drawn down in stages as construction reaches agreed milestones. Typically, interest is capitalised into the loan during the build rather than paid monthly. The loan is then repaid in a single payment at completion, usually from the sale of the completed stock or a refinance.

A construction loan is generally used to build a single residential property, such as a new home or investment property. The borrower typically makes interest-only repayments during the construction as loan funds are progressively drawn down, with lending assessed based on the borrower's income, financial position and ability to service the loan.

A property development finance loan is designed for residential or commercial developments that are being built for sale. Rather than focusing primarily on the borrower's serviceability, the lender assesses the project's feasibility, the value of the completed development, the quality of the security and the developer's experience. Interest is commonly capitalised into the loan during construction, with the facility typically repaid from the sale of the completed development or through refinancing at the end of the project.

Property development finance is secured by the development site. Yard accepts eligible residential and commercial development sites as security, with each application assessed based on the property's location, project type and overall suitability.

The amount you can borrow depends on factors such as the property's value, total development cost, project feasibility and expected value on completion. Subject to our credit criteria, lending is available up to 75% LVR, with total funding generally not exceeding 80% of the total development cost (TDC).

Yard offers commercial and residential property development finance across Australia, including but not limited to property development finance in Melbourne, Sydney and Queensland (QLD), Perth, Adelaide, Canberra. Funding is available for eligible projects in metropolitan and regional locations, subject to Yard’s lending criteria. 

Cost overruns and delays are common risks in development. We recommend confirming construction costs with a quantity surveyor before you apply and building a contingency into your feasibility. If the timeline extends, the loan term can be discussed with your Loan Consultant to agree on an appropriate approach.

Yes. Property development finance is commonly structured through a company or a trust rather than in an individual's name. Yard can assess applications across a range of borrower structures, including more complex ownership arrangements, subject to our lending criteria. Speak with a Yard Loan Consultant to discuss your proposed structure and the documentation required for your application.

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