Can you build a house with a HomeStart loan?

Building is one of the most overlooked paths to a first home, and yes, you can build with HomeStart. It can be a particularly strong option for first home buyers, because building a new home is what unlocks the First Home Owner Grant and, where eligible, stamp duty relief. Here is how building works through HomeStart and what to expect.

You can build through two HomeStart loans

HomeStart offers low deposit construction options through its standard HomeStart Loan and through the Graduate Loan. Both are available for building a home in South Australia, for owner occupied use only. So whether or not you qualify as a graduate, there is generally a HomeStart pathway to building, with the Graduate Loan offering the lower deposit if you are eligible.

Two ways to build

There are two main routes, and HomeStart supports both.

• A house and land package, often through one of HomeStart partner builders, where the land and the build are arranged together.
• Buying your own block of land and choosing your own licensed builder, then building to your own plans.

The house and land route can be simpler and is often arranged with a fixed price upfront, while buying your own block gives you more control over location and design. Which suits you depends on how much choice you want versus how much simplicity.

The deposit to build

As at 2026, building with a standard HomeStart loan generally needs about an 8 per cent deposit, while eligible graduates can build with as little as 5 per cent. As with all HomeStart loans, there is no Lenders Mortgage Insurance, which keeps the upfront cost of a low deposit build much lower than it would be with a mainstream lender.

You need a building pack and a fixed price contract

To build, HomeStart will want a building pack, which means the full set of plans and a fixed price building contract from a licensed builder. The fixed price is important, because it gives both you and the lender certainty about the total cost. With a fixed price in place before the loan is approved, extra costs generally only arise if you later request changes to the contract, so a well planned build keeps surprises to a minimum.

How the grant and stamp duty relief fit in

This is where building shines for first home buyers. Because the First Home Owner Grant applies to new homes, building can make you eligible for the grant, which can go toward your deposit, fees and charges if you qualify. Eligible first home buyers may also access stamp duty relief on a new build. These are run by the state through RevenueSA and have their own rules, so confirm your eligibility there, but together they can meaningfully reduce what you need to find.

How repayments work during the build

Building is financed as a construction loan, which releases money to your builder in stages as the work is completed, rather than all at once. You generally pay interest only on the amount drawn so far, so your repayments build up as the home does. Under the Graduate Loan, building can also come with an early period where repayments are deferred, which eases the pressure of paying rent and a loan at the same time while you wait for the home to be finished. The detailed mechanics of staged payments are covered in our progress payments guide.

The timeline to keep in mind

Building takes longer than buying an established home, and that timeline interacts with your finance. Your pre-approval needs to stay current through the process, the grant is usually paid at a construction milestone rather than upfront, and settlement on the land for a package can be timed to reduce the interest you pay. None of this is difficult, but it does need planning, which is exactly where a broker who understands HomeStart construction lending earns their keep.

Is building right for you?

Building is not automatically better or worse than buying established. It can mean a brand new home, the grant, and stamp duty savings, but it also takes longer and needs more coordination. The right answer depends on your priorities, your eligibility for the grant, and how comfortable you are with a staged build. It is well worth talking it through before you decide.