Construction Loans › What happens if there are variations or cost overruns?

What happens if there are variations or cost overruns?

If you make changes that increase the price after the loan is approved, those variations usually have to be paid from your own funds before the lender releases the next stage payment. The fixed price contract covers only the agreed scope.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

Variations are one of the most common ways a build budget creeps up. Because they sit outside the fixed price contract, the lender will not simply add them to the loan, so you generally cover them yourself. Keeping a cash buffer and finalising your choices early protects you from being caught short mid build.

The key points

Variations sit outside the fixed price contract.
You usually fund them from your own savings.
They can stall the next drawdown if unpaid.
A budget buffer protects against overruns.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.