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Understanding the Standard HIA Progress Payment Schedule and Construction Loan Requirements

Building your dream home is an exhilarating journey, but the financial aspects can sometimes seem overwhelming. To empower you on this path, it's crucial to gain a thorough understanding of the standard HIA (Housing Industry Association) progress payment schedule and the essential construction loan documents required. In this comprehensive guide, we demystify the intricacies of the standard HIA progress payment schedule and shed light on the specific construction loan requirements tailored to Australian. By equipping yourself with this knowledge, you'll confidently navigate the financial landscape of home construction, ensuring a smooth and successful endeavour.

Unveiling the Standard HIA Progress Payment Schedule

The standard HIA progress payment schedule is a fundamental framework used in the construction industry to ensure consistent and fair payment disbursements throughout the construction process. By comprehending and adhering to this schedule, you'll not only foster a transparent and harmonious relationship with your builder but also manage financial risks effectively.

  1. The Importance of Consistency and Fairness: The standard HIA progress payment schedule plays a pivotal role in fostering fairness and consistency for both homeowners and builders. It outlines the predetermined payment amounts at different stages of construction, eliminating ambiguity and facilitating a transparent payment process. By adhering to this schedule, both parties can align their expectations, fostering a harmonious and productive working relationship.

  2. Effective Management of Financial Risks: For homeowners, the HIA progress payment schedule acts as a safeguard against potential financial risks associated with construction projects. By distributing payments across various stages, the schedule helps mitigate risks and ensures that payments align with the progress of the project. This approach provides homeowners with added confidence, as payments are linked to specific milestones and completed work.

  3. Compliance with Industry Standards: The standard HIA progress payment schedule is widely recognised and accepted within the construction industry. Builders and subcontractors are familiar with this schedule, which promotes consistency and facilitates smoother transactions. By adhering to this industry-accepted schedule, you can ensure a seamless construction process, as all parties involved will have a shared understanding of the payment expectations and timelines.

  4. Alignment with Lenders' Requirements: Lenders often require borrowers to adhere to the standard HIA progress payment schedule when financing their construction projects. This adherence allows lenders to assess the project's progress and disburse funds accordingly. Aligning with the schedule can streamline the loan approval process and ensure a steady flow of funds throughout the various construction stages.

By embracing the significance of the standard HIA progress payment schedule, you can confidently manage your finances and build your dream home while mitigating potential risks. In the following sections, we'll explore the breakdown of payments according to this schedule and delve into the essential construction loan documents required.

Navigating the Breakdown of Payments in the Standard HIA Progress Payment Schedule

Breakdown of Payments in the Standard HIA Progress Payment Schedule

The standard HIA progress payment schedule breaks down the total cost of your construction project into several stages, each with its corresponding payment percentage. Let's explore the typical breakdown of payments according to this schedule:

  1. Deposit (5%): The deposit marks the initial payment made upon signing the building contract, showing your commitment to the project. It is usually a small percentage, around 5% of the total contract price. This payment demonstrates your seriousness as a homeowner and helps cover initial expenses and preparations.

  2. Base (15%): The base stage focuses on the foundation and structural work of your home. Payments at this stage cover the costs associated with excavations, foundation construction, concrete slabs, and other essential structural components. It sets the groundwork for the construction process.

  3. Frame (20%): During the frame stage, the skeleton of your home begins to take shape. Payments made at this stage contribute to the construction of walls, roof trusses, and the installation of windows and external doors. The completion of this stage brings your home closer to its final form.

  4. Enclosed (25%): The enclosed stage represents the completion of the external structure and the sealing of the home's interior. Payments made at this stage cover the installation of external cladding, roofing, insulation, and the completion of external doors and windows. Your home starts to become weatherproof and secure.

  5. Fixing (20%): At the fixing stage, internal fixtures and fittings are installed. Payments made at this stage typically cover items such as electrical wiring, plumbing fixtures, cabinetry, flooring, and internal doors. The interior of your home takes shape, reflecting your personal style and preferences.

  6. Practical Completion (15%): The practical completion stage marks the finalisation of the construction project. It includes the completion of all internal and external work, ensuring that your home is ready for occupancy. The remaining payment is made at this stage, signifying your satisfaction with the completed project.

By adhering to the payment percentages allocated to each stage, you ensure that your funds are distributed appropriately throughout the construction process. It also provides a structured framework for builders to manage their cash flow effectively, contributing to a smoother construction journey.

Essential Construction Loan Documents for a Smooth Approval Process

As with a regular home loan, you will need your latest payslips, a few months’ savings statements and other supporting documents—but you will need a few extra things to get a construction home loan. Let's explore the essential construction loan documents you need to ensure a smooth approval process:

  1. Building Contract. The building contract contains things like the construction stages, progress payment schedule, how long the build time is and the price to construct your new home. Here is an example of a full Queensland HIA Building Contract. The good news is that in Queensland, you do not need to sign the building contract to get your finance approved!

  2. Building Plans. Before your home loan is approved, you do not need council-approved building plans, but building plans will give the valuer an idea of the property layout and size.

  3. Specifications. The building specifications give the bank, and valuer, an idea of the types of finishes you will be using in the house and the quality of materials for items like benchtops and appliances. This can make a big difference in the final valuation of the property.

  4. Extra Quotes. Extra quotes can be anything from solar panels to a pool and even additional landscaping. It is worth giving these to the bank’s valuer so they can determine if these will improve the overall property’s value.

By ensuring that you have these essential construction loan documents in order, you can expedite the approval process and enhance transparency between you, the lender, and the valuer. This ultimately contributes to a smoother journey towards building your dream home.

Maximising Your Homebuilding Journey with Expert Guidance

Building your dream home is a significant undertaking, and seeking expert guidance can greatly enhance your homebuilding journey. Consider the following tips to navigate the process with confidence:

  1. Engage a Mortgage Broker: A mortgage broker specialised in construction loans can offer valuable insights and assistance. They have access to a wide range of lenders and can help you find the most suitable loan options tailored to your specific needs. They will guide you through the loan application process and ensure you understand all the terms and conditions. At Loan Savvy, we're always welcome to help you with it.

  2. Consult with a Lawyer: Engaging a lawyer experienced in construction law is essential to protect your legal rights and interests. They will review the building contract, specifications, and other documents to ensure everything is in order. They can provide guidance on any potential legal issues and ensure that the terms align with your expectations.

  3. Collaborate with Experienced Builders and Contractors: Choosing reputable builders and contractors is crucial for a successful homebuilding experience. Research their track record, review past projects, and seek recommendations from trusted sources. A skilled team of professionals will not only ensure quality construction but also adhere to the agreed-upon payment schedule and provide transparency throughout the process.

  4. Regular Communication and Documentation: Maintaining open lines of communication with your builder, lender, and other stakeholders is essential. Document all discussions, agreements, and any changes to the project scope or costs. This helps ensure clarity and avoid misunderstandings.

By enlisting the support of experienced professionals and establishing clear communication channels, you'll navigate the homebuilding process smoothly, minimising potential risks, and maximising the outcome of your dream home.


Understanding the standard HIA progress payment schedule and the necessary construction loan documents empowers you to navigate the financial landscape of home construction with confidence. Adhering to the payment schedule ensures fairness and transparency, while the required documents streamline the loan approval process and property valuation.

Ready to turn your dream home into a reality? Our experienced mortgage broker at Loan-Savvy is here to guide you through the process. Contact us today to benefit from our expertise in construction loans and secure the financing you need for your homebuilding project. Whether you have questions about the standard HIA progress payment schedule or need assistance with the necessary construction loan documents, we're here to provide personalised solutions tailored to your needs. Don't navigate the complex world of home construction alone - let Loan-Savvy be your trusted partner. Reach out to us now to take the next step towards building your dream home.

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