Yes. In most cases you can use a Keystart loan to buy land and build a home on it, rather than buying an established house. Keystart’s Low Deposit Home Loan covers an established home, a new build or a modular home, and Keystart funds the land first, then pays your builder in stages (Low Deposit Home Loan).
One rule to check before anything else: Keystart loans “are not available if you own land or another home at settlement”. If you already own the block, you do not qualify — which catches out more people looking at house and land than any other condition on this page.
The part nobody explains properly is how it works in practice, because building with a Keystart loan is not the same transaction as buying an existing home. It involves two contracts, staged payments, and a price cap that applies to the whole thing rather than the part you are looking at.
House & Land Co is an independent building advisory in Perth. We are not a lender and we do not approve your loan. What we do is find the land, match you to the right builder from our panel, and make sure the total number still fits whatever your lender has approved. Our service costs you nothing — see how we are paid. If you are starting from scratch, the overview is at Keystart home loans in WA.
How building with a Keystart loan works
You sign two contracts, not one
A house and land package is usually two separate agreements:
- A land contract — you buy the block from the developer or the seller.
- A building contract — a builder agrees to build a specific home on that
block for a fixed price.
Your lender looks at both together. The loan funds the land first, then funds the build in stages as it goes up.
The loan pays the builder in stages
This is called progress payment lending, or a construction loan. Instead of one lump sum at settlement, the lender releases money to the builder as each stage of construction is completed and inspected. The usual stages are the slab, the brickwork to plate height, the roof frame and cover, lock up, and practical completion.
Two practical consequences:
- You only pay interest on what has been drawn. Early in the build your
repayment is small, and it grows as the house does.
- You are usually paying rent and a growing loan repayment at the same time.
Budget for both across the whole build period. This is the number that surprises people, not the deposit.
Keystart publishes how this works. There are five drawdowns to your builder — at slab down, at plate height (40% complete), at roof cover (60%), at lock-up (80%) and at practical completion. Interest accrues from the moment the land is drawn down, and your loan balance rises at each stage, so the interest charge climbs through the build. During construction the minimum payment is $400 a month (as at September 2026), payable weekly, fortnightly or monthly, with the first payment due a calendar month after land settlement. You can pay more, and you are encouraged to, but you cannot redraw any of it during the build. Structural or layout variations must be approved by Keystart before you agree them with the builder, and you may have to fund them yourself rather than through a loan increase (What’s different about construction payments, read 7 September 2026). Fees are published in Keystart’s fee schedule, which includes a progress inspection fee for each construction inspection.
Land and build are one number, not two
This is the single most important thing on this page.
A Keystart construction loan funds the land purchase first, then pays your builder in five progress payments, and the construction loan amount is approved against the original building contract you signed (What’s different about construction payments, read 8 September 2026). One loan carries both halves. So the number that decides whether a package works is the land and the building contract together, and a block advertised well under Keystart’s maximum purchase price tells you nothing on its own.
What Keystart does not publish is how it measures total value for a build — whether site works, retaining and provisional sums sit inside its maximum purchase price or outside it. Put that question to Keystart or your broker in writing before you sign anything. The answer decides whether the package in front of you actually fits.
The First Home Owner Grant is a separate test with its own threshold, and WA does state its rule plainly: under a comprehensive home building contract the total value is the value of the building contract including any contract variations plus the value of the land (WA Department of Treasury and Finance FHOG fact sheet). That is a useful picture of what a total-value test can take in. It is not Keystart’s test and should not be treated as one.
Keystart’s own maximum purchase price is set per loan product, and it moves. Read it on the Low Deposit Home Loan page rather than from a figure quoted here or anywhere else. Keystart’s own pages disagree about region. Before you apply says there are higher property purchase limits in regional areas and the State’s North West, while the region selector on the Low Deposit page moves the income limits and leaves the maximum purchase price where it was. Do not plan a regional purchase around a higher cap until Keystart confirms one in writing.
What matters is land plus build plus everything the builder’s base price leaves out.
What the base price usually leaves out
A builder’s advertised price is rarely the price of a finished, liveable home. The items that commonly sit outside it include:
- Site works — earthworks, retaining, drainage, rock or sand pad requirements
- Connection of power, water and sewer where the block is not fully serviced
- Floor coverings, window treatments, and sometimes a driveway and landscaping
- Estate-specific design guidelines, such as a required facade upgrade
- Council or developer requirements particular to the block
Each of these can push a package over a cap that looked comfortable at the enquiry stage. Getting an honest all-in number before you commit is most of the job, and it is the part of a package we look at hardest.
The order things happen in
- Establish your borrowing capacity with Keystart or a mortgage broker
before you look at land. Not after.
- Work out the total build-to price the cap allows, and take the site costs
off it.
- Choose land that leaves room for the build. A cheap block with expensive
site works is not a cheap block.
- Get a fixed-price building contract that includes site works, so the
number the lender approves is the number you actually pay. Fixed price versus cost plus is a decision worth understanding before you sign.
- Settle the land. Your lender funds the land purchase.
- Build. The lender releases progress payments against completed stages.
- Practical completion and handover.
Between step five and step seven is where most of the anxiety lives, because build times in WA have stretched. Ask for the builder’s current realistic timeline in writing, not the brochure one.
The traps worth knowing about
Variations eat your cap. Every upgrade you sign during pre-start adds to the contract price. If you started close to the cap, a handful of changes can push you over it and trigger a re-approval.
Valuation can come in under contract. Lenders value the finished property. If the valuation lands below your total cost you may need to cover the difference, which for a low-deposit borrower is a serious problem.
Land settlement timing. If the land title is not yet registered, settlement can be months away. Keystart does not publish how long a conditional approval stays valid. Its material describes the approval letter and the list of conditions attached to it without naming a period (Home loan process, Why get conditional approval, both read 8 September 2026). Ask for the expiry date in writing when your letter is issued, and ask what happens if the title is not registered before it. Any re-assessment would be run on your income, the rates and the contract price as they stand then, not as they stood when you signed.
Builder price rises before slab. Contracts differ in how much a builder can increase a price before construction starts, and this has genuinely happened to WA buyers. Read the rise-and-fall clause, or have someone read it for you.
You must live in it. Keystart lending is for owner-occupiers, so a build you intend to rent out will not qualify. Keystart’s condition is owner-occupiers only, “meaning you plan to live in your home for the duration of your loan with us” (Do you qualify). The First Home Owner Grant has a separate and shorter test — six continuous months, starting within twelve months of completion.
Where an independent advisory fits
We are not the lender and we do not arrange your finance. What we do, at no cost to you, is the part between the loan approval and the keys:
- Find land in Perth and the WA growth corridors that leaves room inside your cap
- Match you to a builder from our panel whose price and current build times
actually suit the number you have
- Read the inclusions and tell you what the base price is missing
- Keep the total inside whatever your lender has approved, through pre-start and
variations
Because we are paid by our builder partners rather than by you, comparing packages costs you nothing. You can start with the current house and land packages.
Frequently asked questions
Can I use Keystart to build rather than buy an existing home? Yes. The Low Deposit Home Loan covers an established home, a new build or a modular home. Not every Keystart product allows a build, so check the product page for the loan you are applying under.
Does the Keystart price cap include the land? Yes — the cap is assessed on land and build together, not the land on its own. Exactly how Keystart counts site works is not published; ask before you commit to a block.
Do I make repayments while the house is being built? Yes, but only on the money drawn so far, so the repayment grows through the build. Assume you are paying rent at the same time.
What happens if my build goes over the price cap? It can require re-approval and in some cases the shortfall must be covered from your own funds. The way to avoid it is to leave room before you start.
Can I use the First Home Owner Grant on a new build with Keystart? Yes, and Keystart will advance it. The grant is a one-off payment of up to $10,000 for a new home, with no income or assets test and its own property value cap, which was reset on 7 May 2026 — read the current cap on wa.gov.au. It is not available on established homes. Keystart advances the grant to your loan account so you can put it towards the land or a payment to your builder, and charges interest on the advance until the Office of State Revenue actually pays it, which it will not do until it is satisfied the build is underway.
Do you charge me for this? No. Our service is free to you. See how we are paid.
