Building a second storey addition is one of the smartest ways to create more space without leaving the home and location you love. The good news is—there are several ways to finance your project, and most homeowners are surprised at how achievable it can be.
Below are examples of the most common options some of our clients use finance their build;
1. Construction Loan (Most Common)
A construction loan is specifically designed for building projects and is the most popular option for second storey additions.
How it works:
- Your lender approves the total build cost
- Funds are released in stages as construction progresses
- You only pay interest on the amount drawn down
Why it works well:
- Tailored for building projects
- Aligns with our fixed-price contract and build stages
- Helps manage cash flow during construction
Best for:
Homeowners who want a structured, bank-supported approach to funding their addition.
2. Equity Loan / Top-Up
If you’ve built up equity in your home, you may be able to borrow against it to fund your addition.
How it works:
- Your lender assesses your current property value
- You borrow against the available equity
- Funds can be used for planning, approvals, or construction
Why clients choose this:
- Often faster than a full construction loan
- May have lower interest rates than personal loans
- Can cover the $30K planning & approvals stage upfront
Best for:
Homeowners who have owned their property for several years and have strong equity.
3. Refinancing Your Home Loan
Refinancing involves replacing your current mortgage with a new one that includes additional funds for your project.
How it works:
- Your home is revalued
- A new loan is structured to include your addition costs
- You may also secure a better interest rate
Benefits:
- Consolidates everything into one loan
- Potentially reduces overall repayments
- Unlocks equity in a simple structure
Best for:
Homeowners already considering switching lenders or restructuring their loan.
4. Cash + Lending Combination
Many of our clients use a mix of savings and finance to fund their project.
Typical structure:
- Cash covers planning & preliminaries (~$30K)
- Loan covers the construction cost
Why this works well:
- Reduces total borrowing
- Improves borrowing capacity
- May reduce interest costs over time
Best for:
Clients who want to minimise debt while still moving forward with their build.
Understanding What You Need to Finance
When planning your budget, it’s important to account for two key components:
1. Planning & Approvals (Preliminaries)
Allow approximately $30,000 for:
- Survey
- Architectural design
- Engineering
- Council approvals (DA/CDC)
- Reports, fees, and permits
This is paid before construction and is required to get your project approved and build-ready.
2. Construction Cost
Your selected package (typically $264K–$319K+) plus any upgrades or site-specific requirements.
When Should You Speak to a Lender?
We recommend speaking to a broker or lender after receiving your initial quote.
At this stage:
- You have a clear project cost
- You can seek accurate pre-approval
- You understand your borrowing capacity
- This aligns with our process and ensures you move forward with confidence.
We Make the Process Simple
At Smart Home Additions, we structure our process to make financing straightforward:
✔ Fixed-price build contracts
✔ Clear breakdown of preliminaries and construction
✔ Staged construction timeline (10–12 weeks)
✔ Documentation lenders require
We also regularly work alongside brokers and lenders to help streamline approvals.
Not Sure What Option Is Right for You?
Every homeowner’s financial position is different, which is why the first step is understanding what your project is likely to cost.
Once you have an accurate build estimate, you can:
✔ Understand your total project budget
✔ Explore your finance and lending options
✔ Speak with a lender or mortgage broker with confidence
✔ Determine what is achievable based on your borrowing capacity
At Smart Home Additions, we provide fixed-price build estimates tailored to your home, block, and goals—giving you the clarity you need before making any financial decisions.
Book a Consultation
✔ Professional build cost estimate provided within 3–5 business days
✔ Tailored advice based on your home and site conditions
✔ Fixed-price build packages from $264,000+
✔ Consultation fee credited towards your project when you proceed
Whether you’re just starting to explore your options or ready to move forward, we’re here to help.
Call (02) 4647 7976 or book your consultation today to discover how achievable a second storey addition could be.
Smart Home Additions – Building affordable second storey additions across Sydney.
Disclaimer
The information contained in this article is provided for general informational purposes only and does not constitute financial, lending, taxation, legal, or investment advice. Smart Home Additions and 32 Degrees Building Pty Ltd are licensed building companies and are not qualified financial advisers, mortgage brokers, accountants, or lenders.
Financing options, loan products, borrowing capacity, interest rates, lending criteria, and approval requirements vary between individuals and financial institutions and are subject to change. Readers should seek independent advice from a suitably qualified mortgage broker, lender, financial adviser, accountant, or other professional before making any financial decisions.
Any examples, costs, timeframes, or figures referenced in this article are indicative only and should not be relied upon as a guarantee of finance approval, lending capacity, project costs, or future outcomes. Smart Home Additions and 32 Degrees Building Pty Ltd accept no liability for any loss or damage arising from reliance on the information contained in this article.
