An indicative assessment within 2 business days for knocking down and rebuilding on your own block
- Indicative assessment within 2 business days; lender approval usually takes 2 to 6 weeks once the plans, building approval and contract are ready
- Loans from $100K to $2M, covering what you still owe on the current house plus the cost of the new one
- Homeowners who plan to demolish the house they own and build a new home to live in on the same land
- Interest during the build on the balance carried over and on each stage once drawn, with repayments assessed alongside rent or other accommodation
- Full-doc (tax returns), low-doc or alt-doc (BAS, bank statements or an accountant's letter instead) options across our 90+ lender panel
You like the street and the block, but the house on it no longer works for you. The finance involves more steps than a standard build. Your current home loan is still running, you pay for somewhere else to live, and the old house comes down before the new one exists. Most people fund this with a construction loan, which pays the builder in stages and charges interest on the balance carried over and on each stage once paid out. Joseph Farhat and his team can look at what you owe, the building contract and your income, and tell you plainly whether the loan is likely to fit your income.
Who we can help access finance
- Owners of an older or poorly laid out house who want a new home without leaving the street.
- Families who need more space and want to stay in the suburb, with a builder's quote or contract in hand.
- Owners still paying off the current home, who need that balance and the build cost under one approval.
- Homeowners who will rent nearby during the build and want to see the rent and the repayments side by side.
- Owners of a house built before 1987, where asbestos removal has to be priced into the demolition.
- Sole traders and company directors whose income evidence is BAS and bank statements rather than recent returns.
How Knockdown Rebuild Loans Work
A knockdown rebuild loan is usually a construction loan over land you already own. Any balance still owing on the current house is usually refinanced or rolled in, so one approval covers the existing debt and the build. Lenders typically value the property "as if complete": the land plus the finished home, worked out from your building contract and plans. After demolition, the builder invoices at the end of each stage and the lender releases that payment. Interest applies to the balance carried over from your current loan, and to each stage payment once it is drawn. Once the home is finished, the loan moves to regular repayments. Your land and the home being built are security for the loan, so they are at risk if repayments are not met. Get independent legal advice on the loan documents before you sign.
Lenders release money for the work only once the building approval has been issued. In NSW that is usually a complying development certificate (CDC). In some cases it is development consent from council, after a development application (DA), plus a construction certificate. The NSW Planning Portal says a knockdown rebuild can take up to 12 months to complete, and that accommodation and storage costs belong in the project budget.
Joseph Farhat and his team review the loan you have now, the contract and your income, match you to a lender from the 90+ panel, and manage the application until the builder receives the last stage payment. We are a finance broker, not a certifier, town planner or lawyer. Your certifier or council confirms the approval path, and a solicitor can review the building contract before you sign it.
What Lenders Assess for Knockdown Rebuild Loans
The existing loan
the balance, whether a fixed rate carries a break cost if refinanced, and how the lender plans to restructure it.
The finished value
a valuer works from the plans and specifications, and that figure sets the loan amount.
Approvals and the contract
a fixed-price contract with a licensed builder, the plans, the CDC or development consent, and the builder's insurance.
Demolition costs
whether demolition, asbestos removal and disconnecting services sit in the builder's contract or in separate quotes.
Two housing costs at once
rent or other accommodation plus loan repayments, tested against your income. Banks add a buffer of 3 percentage points to the rate when testing repayments, an APRA setting confirmed on 28 May 2026.
Equity and the LVR
the loan-to-value ratio (LVR), the loan as a share of the property's value. Above 80%, lenders mortgage insurance (LMI) usually applies, which covers the lender rather than you.
Your income
payslips, or tax returns or alt-doc evidence if you work for yourself.
The Knockdown Rebuild Loan Process: What to Expect
- Talk to Joseph Farhat and his team about the block, what you owe on it, the builder's quote and where you will live during the build.
- Send the current loan statement, the draft or signed contract, the plans, any CDC or DA paperwork, and your income evidence.
- We compare how lenders on the panel handle the existing loan, the demolition and the stage payments, and show you the trade-offs.
- The lender values the finished home and issues an approval with a payment schedule. We walk you through its conditions before you accept.
- The current loan is refinanced or restructured, the old house comes down, and the builder is paid stage by stage until handover.
Indicative Finance Options
| Lender Type | Pricing | Typical Loan Range | Your Current Loan | During the Build | Speed to Approval |
|---|---|---|---|---|---|
| Bank | Sharpest available pricing | $100K to $2M | Usually refinanced or rolled into the construction loan | Interest on drawn funds only; interest-only repayments with many lenders | 2 to 6 weeks |
| Non-Bank Lenders | Priced for flexibility | $100K to $2M | Usually refinanced into the construction loan | Interest on drawn funds only; alt-doc and low-doc options | 2 to 4 weeks |
| Private Finance | Not typically used for a knockdown rebuild of an owner-occupied home. Available for unique scenarios only. | ||||
Indicative figures only. Actual terms depend on your circumstances, the property, and lender assessment at the time of application. We quote your rate and comparison rate for your specific loan amount and term before you apply. Terms are subject to change.
Why borrowers choose Settled With Joe for knockdown rebuild loans
We represent you, not the lender
the best interests duty we owe on consumer credit covers every step, from the first call to handover.
The existing loan dealt with first
what you owe now, and any break cost on a fixed rate, are part of the plan before a builder is booked.
Demolition costs in view
asbestos removal and service disconnection can fall outside the building contract, so the budget has to cover them, from savings or the loan.
One lender approached first
each credit enquiry is recorded on your file, so we work out the right lender before anything is lodged.
90+ lenders on one panel
bank, non-bank, and specialist, so a clean file with a fixed-price contract can reach bank pricing.
Private finance for unique scenarios
for a situation bank and non-bank lenders do not suit, we can introduce you to private finance options.
Usually no direct cost to you
as a broker we are typically paid by the lender on settlement.
An honest answer early
if what you owe plus the build does not fit your income, you hear that before you sign with a builder.
Frequently asked questions
What is a knockdown rebuild loan?
It is finance for demolishing the house you own and building a new home on the same land. In most cases it is a construction loan that also takes over the balance of your current home loan. The lender pays the builder in stages, and the loan carries on as a standard home loan once the new home is finished.
Will applying affect my credit score?
Every credit application is recorded on your file, approved or not, and a cluster of them in a short period can count against you. With the existing loan, the build and the timing all in play, it is tempting to test several lenders at once. We look at your loan, contract and income first, then approach the lender most likely to suit your situation.
What is a comparison rate, and why are no rates shown on this page?
A comparison rate combines the interest rate and standard fees into one figure, worked out for a set amount and term. Your loan amount depends on what you still owe plus the building contract, so a headline figure on this page would tell you little. Once those numbers are known, we give you the rate and comparison rate for your loan amount and term before you apply.
Do you work with borrowers with bad credit?
Yes, we do. A default or missed payments on your file do not automatically rule out a knockdown rebuild loan, and you will not be judged for it. Lenders look at what the listing is, when it was recorded, whether it is paid, and how your current home loan has been repaid since. Some lenders on our panel weigh your income and the finished home's value more heavily, and charge more to reflect the risk instead of saying no. Mention it on the first call so the right lender is approached first. Approval is never certain, and we will tell you honestly what looks likely.
Do you act in my best interests?
Yes. Settled With Joe owes you a best interests duty whenever we give credit assistance on consumer lending, and where our interests conflict with yours, yours come first. We make reasonable inquiries into your requirements, objectives and financial situation, and take reasonable steps to verify it. For a knockdown rebuild, that includes asking where you will live during the build and what that costs. We must not suggest a loan that is unsuitable for you. Before we give credit assistance, we send you our Credit Guide, which explains how we are paid and how to make a complaint.
Do I keep paying my current home loan while the new house is built?
Yes, but usually as part of one loan. Lenders commonly refinance or roll the balance into the construction loan, so you make one set of repayments, often interest only during the build. You will also be paying rent or other accommodation, so lenders test both costs together against your income.
How do lenders value a property once the house is knocked down?
Most lenders value it "as if complete", meaning the land plus the new home, based on the building contract and plans. That valuation, not the contract price, sets the loan amount. If it comes in below the land value plus the build cost, the lender may lend less than you planned, and the gap comes from your savings or other funds. Valuers can reach different figures, and we can talk you through what that means before you commit to a lender.
Do I need a DA or a CDC to knock down my house?
In NSW, demolition can usually go ahead under a CDC issued under the Demolition Code, and a CDC can be issued in as little as 20 days. A DA averages 70 days to decide. In a heritage conservation area, a CDC covers only limited demolition, so the rest needs a DA. With development consent, you also need a construction certificate and a principal certifier before work begins. Your certifier or council confirms which path applies to your land.
What insurance does my builder need, and what if they stop work?
For NSW residential work above $20,000, your builder must hold home building compensation (HBC) cover and show you proof before starting work or accepting any payment, deposit included. The deposit is capped at 10% of the contract price. A contract over $20,000 needs a progress payment schedule and gives you a 5 clear business day cooling-off period. If the builder becomes insolvent, dies or disappears, the Home Building Compensation Fund (HBCF) is a last resort scheme, capped at $340,000 per dwelling with a sub-limit of 20% of the contract price for non-completion.
Can I use the 5% Deposit Scheme for a knockdown rebuild?
No. A knockdown rebuild is on land you already own, and the Australian Government 5% Deposit Scheme, renamed from the First Home Guarantee and the other Home Guarantee Scheme streams on 1 October 2025, says a new loan to build on land owned before securing a Scheme place is not eligible. Its Information Guide sets out the full rules.
Why work with Settled With Joe to arrange your knockdown rebuild loan?
Because the current loan, the demolition, the build and your rent are worked through in one conversation, not a round of separate applications. We help families rebuilding in the suburb they know, and self-employed people and directors whose income takes more paperwork to show. There is no judgement in the conversation. What lenders care about is the finished valuation, the contract and approvals, and whether you can carry the repayments and your rent. Our panel covers 90+ bank, non-bank, and specialist lenders, so a clean file can go to a bank at a sharper rate. We are based in Sydney and arrange loans across Australia. Joseph Farhat and his team will give you an honest answer early on what is achievable.
Do you give financial advice?
No. We do not guide you on your finances, nor give financial advice. We focus on outcomes and solutions of presenting your unique scenario to the right lender so you can access funding in a timely and compliant manner.
Do you help with knockdown rebuild loans outside Sydney?
Yes. Settled With Joe is based in Sydney and arranges knockdown rebuild loans Australia-wide, covering both metro and regional areas. We work with clients in Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra, as well as regional areas including Newcastle, Wollongong, Geelong, Gold Coast, Sunshine Coast, and Toowoomba. Demolition approvals and builder insurance differ by state, so the NSW details here may not apply to you. Joseph Farhat and his team will identify which lenders on the panel suit your block and your builder.
