Building a new home is an exciting milestone. From choosing the perfect floor plan to selecting colours, finishes, and fixtures that reflect your style, there’s plenty to look forward to.
But before construction begins, there’s one important question to answer: how are you going to finance it?
While modular homes offer one of the smartest and most affordable paths to homeownership in Australia, financing them has traditionally been more complex than a standard home loan.
Fortunately, that’s changing. More lenders now offer flexible finance options for off-site construction. In 2025, the Commonwealth Bank became the first major Australian lender to offer construction loans with progressive drawdowns for off-site builds, making modular homes more accessible than ever.
Understanding your finance options is the first step towards turning your plans into reality. In this guide, we’ll explain everything you need to know about modular home finance, including the different loan options available, deposit requirements, government grants and incentives, and the step-by-step journey from loan pre-approval to moving into your new home.
How Modular Home Finance Differs from Traditional Home Loans
Financing a modular home isn’t quite the same as financing a traditional build. The biggest difference comes down to where your home is built and when lenders release funds.
- With a traditional home, construction happens on your land. As the build progresses through milestones like the slab, frame, lock-up, and fit-out stages, your lender inspects the work and releases progress payments. Because the partially completed home sits on your property, it acts as security for the loan.
- Modular homes, however, follow a different process. Most of the construction takes place in a controlled environment before the home is transported and installed on your land. During this stage, the only security a lender has is the land itself, which is why banks have historically been more cautious about financing modular builds.
In the past, many lenders wouldn’t release funds until the home had been delivered and installed, leaving buyers to cover a large portion of the build costs upfront.
However, as demand for modular homes continues to grow, lenders are adapting. More banks now offer finance solutions specifically designed for off-site construction, with flexible progress payment schedules that better reflect the modular building process.
In 2025, Commonwealth Bank became the first major Australian lender to introduce construction loans with progressive drawdowns for factory-built homes. If you build with a CommBank Assessed Manufacturer like Wright Choice Homes, you may be able to access up to 80% of your build contract value while your home is still being constructed in the factory, with the remaining funds released after installation and connection to essential services.
Other banks, credit unions, and specialist lenders have also expanded their modular home finance options, making it easier to secure funding.
- National Australia Bank (NAB): NAB offers flexible construction loans that can be adapted to suit modular home builds with the appropriate building documentation.
- Bankwest: Bankwest supports modular construction with flexible progress payments and, in some cases, offers up to 95% land value financing.
- Westpac: Westpac’s construction loans can be tailored to modular builds, provided the construction schedule and documentation meet its lending requirements.
- ANZ: ANZ assesses modular home finance on a case-by-case basis, with approval depending on a clear building contract, approved plans, and an experienced builder.
While every lender has different requirements, working with an experienced modular home builder can help streamline the process by providing the documentation and support your lender needs.
How an Assessed Manufacturer Makes Finance Easier
A CommBank Assessed Manufacturer is a modular builder that has been independently assessed by the Commonwealth Bank as meeting their criteria for prefab construction lending. The assessment covers the builder’s onshore manufacturing facility, financial stability, insurance, licensing and track record.
Wright Choice Homes holds this accreditation*. For buyers, that means a direct, practical advantage when it comes to financing your modular home.
💡Here is what that means on a $350,000 build.
With a CommBank Assessed Manufacturer, you can access up to 80% of that contract price ($280,000) during the off-site factory build stage. That is $280,000 you do not need to fund out of your own pocket while the home is being built.
The remaining 20% is released once the home has been transported to your site, permanently fixed to the land, and connected to all essential services.
With a non-assessed builder, that same $350,000 build would give you access to only $210,000 (60% of the contract, or 120% of the land equity, whichever is lower). The difference of $70,000 is cash you would need to find yourself during the build, and that is a significant gap for most buyers.
Types of Loans Available for Modular Homes in Australia
There isn’t a single loan product designed specifically for modular homes. Instead, the right finance option depends on your circumstances, including whether you already own land, the size of your project, and how your home will be built.
1. Construction Loans
A construction loan is the most popular way to finance a modular home. Like a traditional construction loan, funds are released in stages as your build reaches agreed milestones. However, because modular homes are built in a factory, the payment schedule can differ from a conventional on-site build.
Some lenders, such as Commonwealth Bank, now offer progressive drawdowns that include the factory construction stage for approved builders. This means you only pay interest on the funds that have been released, rather than the full loan amount. Once your home is delivered, permanently installed, and construction is complete, the loan typically converts to a standard home loan.
2. Standard Home Loans
A standard home loan may be suitable if the modular home has already been completed and permanently fixed to the land before settlement. This is common when purchasing a ready-built modular home or a house-and-land package where the builder has funded the construction before the sale.
In these situations, the lender treats the purchase much like buying an existing home, making the finance process simpler than a construction loan.
3. Land Loans
If you’re purchasing land before you’re ready to build, you may choose a land loan first and then transition to a construction loan when construction begins. This approach allows you to secure your block while giving you time to finalise your home design, approvals, and builder.
4. Equity Loans or Refinancing
If you already own a home and have built up equity, refinancing or accessing that equity can be one of the most cost-effective ways to finance a modular home. Because you’re borrowing against an existing property, you’ll generally benefit from lower home loan interest rates compared to unsecured lending, potentially reducing your overall borrowing costs.
5. Personal Loans
For smaller modular projects, such as granny flats, studios, or cabins, a personal loan may be an option. These loans are generally quicker to arrange and don’t require property as security. However, they typically come with higher interest rates and shorter repayment periods than home loans, making them better suited to lower-value projects.
6. Guarantor Loans
If saving a large deposit is a challenge, a guarantor loan could help. A family member can use the equity in their property as additional security, reducing (or even eliminating) the need for a cash deposit. This option is particularly popular with first-home buyers who have a stable income but limited savings. As lender requirements vary for modular construction, it’s worth speaking with a mortgage broker to determine whether a guarantor loan is suitable for your project.
How To Secure Finance For Your Modular Home
Getting finance for a modular home is more straightforward than many people expect. With the right lender, broker, and builder, you can move from planning your new home to starting construction in just a few simple steps.
- Â Speak to a Mortgage Broker: Start by talking to a mortgage broker with experience in modular home finance. They’ll help you compare lenders, understand your borrowing capacity, and find a loan that aligns with your builder’s construction schedule.
- Â Get Pre-Approval: Loan pre-approval gives you confidence to move forward, showing how much you can borrow before committing to a build. You’ll typically need proof of income, identification, bank statements, and details of your deposit and existing debts.
- Â Choose a Reputable Builder: Your choice of builder plays an important role in securing finance. Look for a licenced builder that offers fixed-price contracts and has experience working with lenders. Builders accredited by major lenders, such as CommBank Assessed Manufacturers, may also provide access to more flexible funding throughout the factory build stage.
- Â Finalise Your Documentation: Before construction begins, your lender will usually require a signed building contract, proof of land ownership or purchase, council approvals, and evidence of your builder’s licensing and insurance.
- Â Begin Construction and Progress Payments: Once your loan is approved, funds are released in stages as your modular home progresses through construction. Depending on your lender and builder, this may include payments during the factory build, followed by the final drawdown once your home is installed and connected to essential services.
Government Grants and First Home Buyer Support
One of the biggest advantages of building a modular home is that you’re eligible for many of the same government grants and incentives as traditional new builds. As long as your home is new, permanently fixed to land, and built under a fixed-price contract by a licenced builder, you may be able to access thousands of dollars in financial assistance.
Queensland First Home Owner Grant
Eligible first-home buyers can receive a $30,000 First Home Owner Grant for contracts signed before 30 June 2026 or $15,000 after 30 June 2026. To qualify, the home must be new, valued at less than $750,000 (including land), and occupied as your principal place of residence for at least six months.
First Home Guarantee
The First Home Guarantee allows eligible buyers to purchase or build a home with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI). Current property price caps are $1 million in South East Queensland and $700,000 in regional Queensland, and the scheme can be used alongside the First Home Owner Grant.
Stamp Duty Concessions
From 1 May 2025, eligible Queensland first-home buyers pay no stamp duty on new homes or vacant residential land. Depending on the value of your property, this could save you $20,000 to $25,000 or more, significantly reducing your upfront costs.
First Home Super Saver Scheme
The First Home Super Saver Scheme (FHSSS) allows eligible buyers to withdraw up to $50,000 in voluntary superannuation contributions to use as a home deposit. Because these contributions are taxed at concessional rates, it can be a tax-effective way to save for your first home.
If you’re unsure which grants or schemes you’re eligible for, your mortgage broker or finance specialist can guide you through the application process and help you maximise the support available for your modular home build.
Tips for Securing Modular Home Financing
Getting approved for a modular home loan is often easier when you plan ahead. These simple tips can improve your chances of securing finance and help your build stay on track:
- Work with a Mortgage Broker: Not all lenders understand modular construction. A mortgage broker with experience in modular home finance can recommend lenders that support off-site builds and help structure your loan to match your builder’s payment schedule.
- Choose an Accredited Builder: Your builder can have a direct impact on your financing options. Working with a licenced, reputable builder may provide access to more flexible progress payments during the factory build stage.
- Opt for a Fixed-Price Contract: Lenders prefer the certainty of a fixed-price building contract. It clearly outlines the total cost of your home, reduces the risk of unexpected expenses, and can make the loan approval process much smoother.
- Explore Government Grants: If you’re a first-home buyer, take advantage of available grants and government support schemes. These incentives can boost your deposit, reduce your borrowing costs, and make homeownership more affordable.
- Budget For The Full Project: When planning your finance factor in expenses such as land purchase, site preparation, council approvals, utility connections, driveways, landscaping, and a contingency fund for unexpected costs. Having a realistic budget from the outset will help you avoid financial surprises and give your lender greater confidence in your application.
Why Choose Wright Choice Homes?
Financing a modular home is easier when you have the right builder by your side. At Wright Choice Homes, we work closely with you, your mortgage broker, and your lender to make the finance process as simple and stress-free as possible, helping you move into your new home sooner.
- CommBank Assessed Manufacturer: As a CommBank Assessed Manufacturer, eligible buyers may access up to 80% of their build contract value during the factory construction stage, making modular home finance more accessible.
- Fixed-Price Build Contracts: Every home comes with a fixed-price contract, giving you and your lender certainty over the total build cost from the very beginning.
- QBCC Licensed: We’re fully QBCC licenced and build compliant Class 1A residential homes, giving lenders confidence that your home meets Australian building standards.
- We Coordinate with Your Lender: Our team works directly with your broker and lender to align progress payments with our construction milestones, helping keep your build on schedule.
- Family-Owned, Queensland Built: Based in Caboolture, we have over 100 years of combined experience, with every home built locally in our own factory.
- Faster Build Times: Factory-controlled construction reduces weather delays, helping you move into your new home sooner and minimise holding costs.
Final Thoughts
With more lenders embracing off-site construction, flexible loan options, and government grants available to eligible buyers, owning a high-quality modular home is becoming an increasingly achievable goal.
The key is to plan ahead, understand your finance options, and work with experienced professionals who understand the modular building process. By choosing the right lender, mortgage broker, and builder, you’ll be well positioned to secure finance with confidence and enjoy a smoother journey from approval to move-in day.
At Wright Choice Homes, we’re proud to be a CommBank Assessed Manufacturer with decades of industry experience building high-quality modular homes across Queensland. Our fixed-price contracts, QBCC licensing, and commitment to quality provide the certainty that lenders and homeowners value. Explore our range of modular home designs or speak with our team to learn more about building with Wright Choice Homes.
