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Construction and renovation

What happens when your build runs over budget?

Start with the total amount needed to finish the home, not just the next invoice. Then compare the undrawn loan, cash available and any extra funding the lender may approve.

Updated Jayden VecchioMortgage BrokerReviewed byJoshua VecchioDirector & Mortgage Broker
Fact checked
Site preparation and earthworks for new homes in Clyde North, Victoria
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The next invoice was only part of the problem. Scott and Natalie were $50k short across the rest of their renovation, so I built the request around the amount needed to finish the home.

Client story

Scott and Natalie found a $50k hole 2 weeks before a $108k draw

They were midway through a Brisbane extension when rock excavation, steel and prime-cost changes pushed the build short. Signed variations totalled $65k. That was money they didn’t have.

I helped Scott and Natalie pull the rescue plan together. I got the variations into one signed schedule, ordered an updated $1.15m valuation for the finished home and reran the numbers after Natalie returned to work. The lender approved a $65k increase, the $108k claim was paid on time and they completed the build.

What got the renovation moving again was proving that a $65k increase would finish the whole project. Paying the next invoice alone would have left the same problem waiting at the next stage. With the updated valuation and Natalie's return-to-work income, the lender had enough to approve the increase before the draw was due.

How much money is needed to finish the build?

First, I check whether the shortfall affects only the next payment or the rest of the build. I compare:

  • Money available

    The money left in the loan, plus cash you can put towards the build. Count any savings set aside for unexpected costs once. The lender still needs to approve each payment.

  • Costs still to pay

    The unpaid contract amount, agreed changes and essential work outside the contract. Keep optional upgrades separate.

  • Shortfall or money left over

    Subtract the remaining costs from the money available. Then allow for further changes or delays that could use up what is left.

What should you do before the next builder invoice?

A rushed loan increase request can waste time if the lender has to come back for missing figures. Get these together before the next invoice is due:

  1. Check what the lender can release
    Ask how much is left in the loan, the next approved payment amount and any conditions you still need to meet.
  2. Get an updated builder schedule
    Get the original contract, paid and unpaid claims, agreed changes, proposed changes and the cost to finish in one schedule.
  3. Separate essential work from upgrades
    Ask which upgrades can be deferred without affecting completion or certification. Get building or legal advice before changing the contract.
  4. Check what cash is available
    Check bank statements against deposits already paid and money set aside for other costs. Count each amount once.
  5. Submit the full funding request
    Include the amount needed, why and when you need it, the revised contract, valuation evidence and the budget to finish.

Can the bank lend more to finish the home?

Possibly, but agreeing to a change with your builder does not increase your loan. The lender may need to check:

  • whether you can afford the larger loan
  • the current value and expected value when complete
  • the work completed and whether the invoice matches it
  • the contract, agreed changes and updated cost to finish
  • whether the revised loan and your cash will cover completion

Before agreeing to a change to the building contract, get its effect on the work, price and completion date in writing, then check with your lender. For Queensland domestic building work, QBCC explains the written variation requirements; get advice if you are unsure what you are signing.

Westpac asks to be told promptly about contract price changes and may need a new valuation for significant changes. ANZ has an over-budget process and asks customers to discuss delays beyond the construction period. Check your own loan's cash contribution requirements, payment conditions and completion deadline.

Give the lender the next builder payment date at the start. Even a workable increase may not be ready in time.

Which funding option should you test first?

  1. Remove or defer optional work
    Ask what can be removed without affecting completion, certification or insurance. Check the contract before changing the work.
  2. Use money you have set aside
    Check it is not already needed for fencing, rent, connections or another cost outside the contract.
  3. Add savings you can spare
    Keep enough for interest during the build, rent, moving and immediate completion costs.
  4. Ask your lender for an increase
    Ask for the amount needed to finish the home, with the full budget to support it.
  5. Check other property or refinancing options
    Check cost, timing and whether a lender will accept the unfinished property. Keep the current loan until a replacement is formally approved.
  6. Ask for hardship help early
    Contact the lender if you may miss a loan repayment. Hardship assistance can help with repayments; it does not pay for the remaining building work.

Ask for evidence that answers a question

I start with the figures we still need to confirm, then ask for the documents that support them.

Evidence for your construction loan review
What needs checking?Documents to bring
How much loan is left?Amount left to draw, payment history and approval conditions
What will it cost to finish?Original contract, updated builder schedule, paid claims and signed changes
Which work is optional?Proposed changes, specifications and written builder advice
Can you borrow more?Current income, debts, expenses, revised budget and updated valuation if requested
Can the next invoice be paid?Builder invoice, evidence of the stage completed, inspection result and lender payment requirements

Evidence for your construction loan review

What needs checking?

How much loan is left?

Documents to bring
Amount left to draw, payment history and approval conditions
What needs checking?

What will it cost to finish?

Documents to bring
Original contract, updated builder schedule, paid claims and signed changes
What needs checking?

Which work is optional?

Documents to bring
Proposed changes, specifications and written builder advice
What needs checking?

Can you borrow more?

Documents to bring
Current income, debts, expenses, revised budget and updated valuation if requested
What needs checking?

Can the next invoice be paid?

Documents to bring
Builder invoice, evidence of the stage completed, inspection result and lender payment requirements

Having enough money overall does not mean the lender can release the next payment yet. See how construction progress payments work for the payment process, or challenging a bank valuation if the lender's value has changed.

If the builder or site has stalled

If the builder has collapsed, our builder-collapse guide covers what needs to happen before work restarts.

For a dispute, possible insolvency or an abandoned site, tell the lender promptly and get legal and building advice about the contract, work completed, insurance and protecting the site.

For the lender, gather the inspection and payment records, site insurance, remaining approvals and any replacement-builder quote. A new builder may mean a new contract, valuation and payment schedule. Any replacement lender must accept the unfinished property and be satisfied the new arrangements will fund completion.

If the project is a major renovation or extension, Hunter Galloway's renovation loan guide explains when staged construction finance may apply.

Frequently asked questions

Speak to your current broker or lender

They hold your approval and payment history, so start with them for a shortfall during the build. Once the home is complete and normal repayments begin, Hunter Galloway can help you compare the rate and repayment setup.

Moneysmart explains how to ask for hardship assistance. Free financial counselling is available through the National Debt Helpline on 1800 007 007.

Client examples are based on real situations. Names and identifying details have been changed.

Experience and sources

How this guide was checked

Reviewed 23 September 2026 by Joshua Vecchio.

Written byJayden VecchioMortgage Broker

Jayden Vecchio is a mortgage broker and director at Hunter Galloway. Hunter Galloway Finance Pty Ltd is Credit Representative 476903, authorised under Australian Credit Licence 389328. He holds a Certificate IV in Finance & Mortgage Broking and a Diploma of Financial Planning.

Sources

General information only. Loan increases and progress payments remain subject to lender approval. Obtain advice about your contract, building work and financial circumstances.

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