What Happens When a Development Facility Expires Before Completion
Property Lending Hub
Development Finance · Facility Expiry · Part Built Sites
A development facility has a fixed end date, and construction does not always respect it. This guide covers what actually happens at the maturity date, what a lender is deciding when you ask for an extension, how a refinance on a part built site is assessed, what happens if the new numbers leave a shortfall, and what comes next if rescue finance settles or fails.
Quick Answer
An expiring development facility is a maturity event, not automatically a default. The balance becomes repayable and further advances generally stop. Three paths stay open: an extension, a refinance, or a sale. Which one is available depends on the time left and whether the project can be finished.
Also searched as: construction loan expiry, development loan maturity, facility term running out mid-build, construction facility expiring before practical completion.
Also called: construction loan expiry, development loan maturity, facility expiry mid-build, incomplete-construction facility maturity.
| Where you are right now | What is actually being decided | Start here |
|---|---|---|
| The facility has months to run and the build is behind | Whether the remaining work and a refinance can both finish before the expiry date. | Working backwards from the expiry date, then what an incoming lender needs. |
| You are inside the final weeks before the expiry date | Whether the existing lender will extend, and on what terms. | What a lender looks at on an extension request, then the timeline. |
| The expiry date has passed and nothing is agreed | Whether the position can be held still long enough to solve it. | What a standstill is, and what changes once a demand issues. |
| A formal demand or default notice has already issued | Enforcement, not refinancing. This guide is no longer the right one. | What to do when construction funding has already stopped. |
| You are not the developer: you guaranteed the facility, or you are buying off the plan | A guarantor is asking what the guarantee reaches. An off the plan buyer is asking what happens to their contract and deposit. | What a guarantee reaches, or what happens to presales and deposits. |
| An extension or variation has been offered and is waiting to be signed | What the new document changes, which is rarely only the date. | What an extension letter changes before you sign it. |
| It is the approval, not the loan, that is running out | A planning question, which no lender can extend. | Whether it is your finance or your approval expiring. |
| The incoming valuation or proposed loan is too low to clear the payout and finish the build | Whether the capital shortfall can be closed without creating a second problem behind the new senior debt. | What happens when the refinance leaves a shortfall. |
| The build is complete, but some units have not sold | A post-completion sell-down or residual-stock exit, not finance for unfinished works. | What happens when the construction facility expires with unsold completed stock. |
| A mid-build refinance has settled and the site now has to restart | How the new lender controls drawdowns, builder re-mobilisation, monitoring and the final exit. | What happens after the refinance settles. |
| The builder has stopped work, terminated the contract or gone into administration | Whether there is still a contracted party who can finish, what a replacement costs, and what that does to the lender's cost-to-complete and insurance conditions. | The funding-stopped and builder-failure guide, then return here once the builder and cost-to-complete position is known. |
| The company may not be able to pay debts as they fall due | Solvency and enforcement strategy as well as finance. More debt may not be the first answer. | Speak to a registered insolvency practitioner and your solicitor before new borrowing; if funding has already stopped or a demand has issued, use the funding-stopped guide. |
What actually happens on the day a development facility expires?
On the maturity date, the outstanding balance becomes repayable under the facility agreement and further advances generally stop unless the lender agrees otherwise. Maturity is not automatically the same thing as default. Whether notice, default interest, a demand or enforcement rights follow depends on the facility and security documents. The practical question then becomes whether the debt is extended, refinanced or repaid another way.
The reason this is hard to establish from a search is that the two answers sitting in front of most people contradict each other. One widely repeated answer says that most lenders will not refinance a build that is not finished. Another says that senior lenders step back at exactly this point and non-bank and private lenders step in, and a whole market of lenders advertises precisely that. Both descriptions are accurate about different lenders, which is why both keep surfacing. A senior lender running a standardised credit policy rarely takes on someone else's part built site, because the security is a structure that cannot yet be occupied, sold or valued the way a finished building can. A narrower field of non-bank and private lenders is built around that risk and prices for it. The honest version is that a part built development can be refinanced, by fewer lenders than were available at the start, on terms set by what the project can now prove rather than what it was projected to deliver. That is the practical reality of development finance once a date is fixed.
Two things surprise people more than the repayment obligation itself. The first is that the undrawn balance is not automatically money still available to you after the expiry date. A facility limit is a commitment to advance while the facility is on foot and while the drawdown conditions are being met. Once the term has ended, the commitment to advance further funds generally ends with it, even where the limit was never fully drawn. A project that was relying on the remaining tranches to reach completion can find that the money it was counting on is gone while the debt is not.
The second is that interest does not stop. It continues to accrue, and on most development facilities it continues to capitalise, against a balance that is now due. That is a different question from whether a higher rate applies, which is a matter of the individual loan agreement, and it is one of several reasons a facility that is left to sit past its date gets harder to solve rather than easier.
From the expiry date, three paths stay open, and the rest of this guide is about which one your project can actually reach. An extension from the existing lender, covered in section 2. A refinance to a new lender, covered in sections 4 and 5. A sale, either of the site as it stands or of the completed product, which section 6 explains is priced very differently from the number in your original feasibility. The related but separate problem of an interest-only term ending on a commercial loan follows a similar shape and is covered on its own page.
Did you mean one of these instead? Five searches that land people on the wrong page
Five closely related searches return material that has nothing to do with an expiring development facility, and in testing they do it consistently rather than occasionally. If one of them is what brought you here, the table says where to go instead. If none of them is, the rest of this guide is the right page.
| If you searched this | What you tend to get back | Why it is the wrong answer here | Where to go instead |
|---|---|---|---|
| “cost to extend a construction loan”, “extension cost” | Home renovation and house extension cost pages, builders’ price guides and renovation calculators. | Those pages price building an extension onto a dwelling. This is about extending the term of a loan. The two share one word and nothing else. | What an extension actually costs |
| “construction loan expiring”, “construction loan not finished” | Residential owner-occupier construction loan guides, bank progress payment handbooks and government home buyer scheme material. | A commercial development facility is a different product from a residential construction loan. It has a fixed term, a maturity date, and a commitment to advance that ends with the term. | What actually happens on the expiry date |
| “lender enforcement”, “default notice”, “repossession” | Consumer credit hardship resources, home repossession guides and state law handbooks written for household borrowers. | If the borrower is a company, the National Credit Code does not apply because the Code requires the debtor to be a natural person or strata corporation. If the borrower is an individual or strata corporation, the purpose of the credit also matters, so do not assume the regime from the product name alone. ASIC explains the National Credit Code coverage test; your solicitor confirms how it applies to your documents. | What changes after a demand |
| “development finance expiring”, “my development is expiring” | Council and planning material about development approvals lapsing and permit extensions of time. | The approval and the loan are two separate clocks on the same site, and neither one can extend the other. | Whether it is your finance or your approval |
| “rollover”, “residual stock”, “development exit finance” | Product pages for facilities taken after a building is finished, against stock that has not sold. | Those solve unsold stock. This is unfinished works. They are different problems, with different security and different lenders. | Which one you are actually asking for |
What developers do in the first week, and what each move actually costs
The five moves below are the ones people reach for first, and four of them make the position harder to solve. They are listed because the expensive decisions on an expiring facility are almost never the financing decision. They are the ordinary reactions taken in the days before anyone has read the loan agreement.
| The move | Why it is tempting | What it actually does | What to do instead |
|---|---|---|---|
| Say nothing and wait for the lender to raise it | The conversation is easier if they start it. | It gives away the only part of this you control, which is arriving before the date with a position. Silence is read as no plan, and no plan is priced. | Put your position to the lender in writing before the date, even if the answer is not finalised yet. |
| Send the deal to several lenders at once | It feels like widening the field. | Each approach can want its own valuation and its own upfront or commitment costs, and a file that has visibly been shopped reads as distressed to the next lender who sees it. | Run one properly prepared approach at a time, off one document set, so the second approach is not repairing the first. |
| Stop paying interest to hold cash on site | Cash in the account feels safer than cash paid out. | It converts a scheduled maturity into an actual breach of the agreement, which changes both the lender's options and the language on the file. | Keep the facility performing while it is on foot and raise the cash question with the lender directly instead. |
| Tell the builder to keep going on the promise of money | Momentum feels like progress. | Claims accrue unpaid, the builder stops anyway, and the cost to complete that a new lender is eventually shown is higher than the one you started with. | Agree with the builder now what happens if funding is late, rather than after it is late. |
| Sign whatever extension is offered so the date goes away | Any extension feels better than none. | An extension is a new agreement, not a postponement. Term, fees, conditions and security can all move, and the next date arrives faster than the first one did. | Read what the document actually changes first. The checklist is in what a lender looks at on an extension request. |
| What it is | What triggers it | What the lender can do | What you can still do | Where to go on this page |
|---|---|---|---|---|
| Maturity event | The calendar. The agreed term ends on the date written into the facility. | Require repayment of the balance. Decline to advance anything further. Consider an extension on its own terms. | Ask for an extension, run a refinance, or sell. All three are still normal commercial conversations. | Sections 2, 4 and 5 |
| Covenant default | A term of the agreement is breached before or after maturity. Common examples are a presale condition, a cost overrun, a programme milestone or an information undertaking. | Reserve its rights, reprice, impose conditions, suspend further drawdowns, or in a serious case call the facility. | Disclose early, propose a cure with dates attached, and negotiate a waiver or a standstill before it escalates. | Sections 3 and 8 |
| Review event | A defined event that entitles the lender to re-test the loan without the loan being in default, for example a change in the project, the security or the borrower. | Re-assess the facility, request updated valuation and cost reporting, and set new conditions for continuing. | Get the updated reporting in front of the lender first rather than last, and control the story the numbers tell. | Sections 2 and 7 |
Getting this classification right in the first conversation matters more than it looks. A borrower who describes a maturity event as a default invites the lender to treat it as one. A borrower who treats a review event as a formality tends to find out too late that it was the moment the facility was actually decided.
Can you extend a development facility, and what does a lender look at?
You can extend a development facility, and extensions are granted regularly, but the request is a fresh credit decision rather than an administrative one. That single distinction explains most of what follows.
A lender considering an extension is not deciding whether to be accommodating. It is deciding whether it is extending a loan or refinancing a worse one. The exposure it took on at the start was priced against a project with a programme, a budget, a contract and an exit. The exposure it is being asked to carry now has less time, less contingency, a partly consumed budget and, usually, a builder and a market that have both moved. If the answer to "would we write this loan today, on these facts" is no, the extension request is really a request to accept a deterioration, and it will be assessed that way whatever it is called.
So the lender re-tests the exit, not just the borrower. Your trading history, your other assets and your conduct on the account matter, but they are secondary to whether the loan has a credible way of being repaid inside the extended term. The questions that decide it are whether the project can physically be finished in the time asked for, whether the cost to complete is verified rather than asserted, whether the sales or the refinance that repays the debt is contracted or merely hoped for, and whether the value of the security supports the extended exposure. This is the same set of tests behind what a development facility is for in the first place, applied again with less runway.
It helps to know the difference between a review event and maturity, because they get conflated constantly. Maturity is a date. A review event is a right: a defined trigger that lets the lender re-open the facility mid-term without the loan being in default at all. On a development facility, review triggers commonly attach to things like a material change to the project, a shortfall against the qualifying presale condition, or a cost report that no longer reconciles. The practical consequence is that a lender can bring the whole conversation forward. Many borrowers who believe they have months of runway discover that the facility was re-tested long before the date on the front page.
Fees attach to an extension. Extension fees, review fees, revised line fees and, where the facility is past due, default interest are all real, and every one of them is lender policy set deal by deal rather than a published rate. We do not publish a figure for any of them, because no primary source establishes one and any number we printed would be an invention. The number that matters more anyway is the cost of the time itself, because interest capitalising to the expiry date is what quietly consumes the equity that was supposed to fund the extension.
The capital rule sitting behind the answer
- A 150 per cent risk weight applies to development and construction exposures that do not meet the residential concession Australian prudential standards require an authorised deposit-taking institution to apply a 150 per cent risk weight to land acquisition, development and construction exposures, unless the exposure is secured by residential property and meets a set of stricter conditions, which include a debt to development cost test and a qualifying presale test. Those conditions are harder for a part built project to satisfy than for a new one, which is part of why a senior lender treats an extension as a new decision. This is the lender's own capital treatment. It is never a borrower cost, never an interest rate, and never a limit on what you can borrow. Source: Australian Prudential Regulation Authority, Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk, in force from 1 July 2025. Read 26 August 2026.
General information only. Figures are indicative where marked and current as at the review date shown. Not financial advice; consider your own circumstances and speak to a broker.
If the existing lender declines, the field that will genuinely look at a part built site is largely the private credit market, and it is worth being clear-eyed about what that market is. The corporate regulator's own review of private credit in Australia estimates the market at around $200 billion, approximately half of it real estate related, and a later surveillance of retail and wholesale private credit funds found inconsistent reporting, limited disclosure of borrower pricing and, in many funds, no detailed written policy for handling impairment and default. Poor private credit practices are a named enforcement priority for the regulator in 2026. None of that makes private credit the wrong answer for a project with a real exit and a short funding period to it. It does mean the market is uneven, and that the difference between a well-run private lender and a badly run one is a difference you have to establish yourself rather than assume. These describe the market as a whole. They are not a statement about any individual lender and not a prediction about any individual deal. Sources: Australian Securities and Investments Commission, REP 814 Private Credit in Australia, published 22 September 2025; REP 820 Private credit surveillance, published 5 November 2025; and media release 25-273MR, ASIC announces 2026 enforcement priorities, 13 November 2025, which lists poor private credit practices among the 2026 priorities. All three read 26 August 2026.
One vocabulary note, because it lands in the phone call and almost nobody explains it. When a facility approaches or passes its date, lenders move the file internally, and the words used for that are not words most borrowers have heard. A file put on a watchlist is being monitored more closely and reported on more often; it is not in default and the loan has not been called. A file moved to a workout, restructuring or asset management team has left the relationship banker who wrote it and gone to people whose job is recovering or restructuring exposures. Neither move is an enforcement step in itself, and neither one is a reason to panic. What both mean in practice is that the person you now deal with is measured on a different outcome from the person who approved the loan, so the case has to be made again from the beginning, in writing, with evidence. Ask plainly which team holds your file and what they need. It is a fair question and the answer changes how you prepare.
What an extension letter changes, and what to read before signing it
An extension is a new agreement rather than a postponement of the old one, which is why the document deserves the reading the original facility got. Most of what matters sits in six places, and the two people skip most often are the two with the longest reach: what happens to security and guarantees, and whether the arrangement touches anything outside this project. This is a document for your solicitor, not a form you sign to make a date go away.
| What can move | What to look for | Who should read it |
|---|---|---|
| The term itself | Whether the new date clears the last item on the critical path, not the first. An extension that ends before the slowest dependency finishes buys you a second version of the same conversation. | Your broker, with the builder or programmer |
| Fees | Extension, review and revised line fees, whether they are payable in cash or capitalised into a balance that is already repayable, and whether any of them are payable if the extension does not proceed. | Your accountant and your broker |
| Interest treatment | Whether interest continues to capitalise over the new term, and what the agreement says applies if the new date is also missed. | Your broker |
| Conditions and covenants | New or tightened conditions: presale levels, drawdown tests, reporting frequency, a refreshed cost to complete, updated valuations, and who pays for each of them. | Your solicitor |
| Security and guarantees | Whether existing security and guarantees are confirmed, refreshed or extended to cover the new arrangement, and whether anything additional is being taken. | Your solicitor |
| Anything outside this project | Whether the arrangement reaches other facilities, entities or securities you hold, and what it does to them if this one is not repaid. | Your solicitor |
What does it cost to extend a development facility when the build is running late?
There is no standard figure, because the total is assembled from eight separate lines set by different parties, and the extension fee that gets quoted first is rarely the largest of them. Anyone quoting a single percentage for this is quoting one line out of eight. What is useful is not an average, which would be read as a promise, but the derivation: what is actually payable, who sets each line, and whether it comes out of cash or gets added to a balance that is already repayable.
That last column is the one that changes decisions. A cost capitalised into the facility does not hurt this month, and it does raise the number a new lender has to refinance later.
| Cost line | Who sets it | Cash or capitalised | What moves it |
|---|---|---|---|
| Extension or review fee | The lender, as credit policy rather than a published rate | Commonly capitalised into the balance, sometimes payable up front | The size of the facility, the length of the extension asked for, and how much re-underwriting the file needs |
| Revised line or commitment fee | The lender | Commonly capitalised | Whether the limit itself is changing, not just the date |
| Interest across the new term | The facility’s existing pricing, unless the extension re-prices it | Capitalises on most development facilities | The balance outstanding, the length of the extension, and whether any higher rate applies once the original term has passed |
| Updated valuation | The lender instructs it, you pay for it | Usually cash | The number of lots, the complexity of the basis required, and whether more than one basis has to be reported |
| Quantity surveyor cost to complete report | The lender instructs it, you pay for it | Usually cash | The scale of the remaining works, and how much reconciliation the drawdown history needs |
| Legal costs, the lender’s and your own | The lender’s solicitor for their side, your solicitor for yours | The lender’s side is commonly capitalised, your own is usually cash | Whether security and guarantees are being varied, or only the date |
| Broker or arrangement fee, where one applies | Disclosed to you before you commit | Varies | The complexity of the transaction and what is being arranged |
| Exit or discharge costs, if the extension fails and you refinance instead | The outgoing lender, on the terms of the original facility | Cash at settlement | What the original documents provided for at the outset |
Two practical notes. The lines that usually dominate the total are interest across the new term and the professional reports, not the extension fee that gets quoted first. And several of these are payable whether or not the extension proceeds, so the order in which you commission them matters: ask what is refundable, and what happens to each fee if credit says no, before you instruct anything.
What if the lender refuses to extend the development facility?
If the existing lender refuses an extension, the original debt still has to be dealt with on its maturity terms. The refusal does not create replacement completion money, so the next question is whether the whole exposure can be refinanced, whether the existing lender will stay while a separate completion gap is funded, or whether the project needs a non-finance exit.
- If another lender can take out the existing debt and fund the verified cost to complete, that is a full mid-build refinance, also marketed as an unfinished-development refinance or construction completion finance. The incoming lender will size it on the current site, not the original feasibility.
- If the existing lender will remain but will not increase the facility, a separate junior layer may sometimes fund a defined completion shortfall, subject to the senior documents, consent and as-is equity. That junior layer may be described as mezzanine finance or structured as a second mortgage behind the construction loan, depending on the documents and capital stack.
- If the existing lender wants full repayment at maturity, a second mortgage behind that lender is not a substitute for the takeout. The senior exit has to be solved first.
- If a formal demand, receiver warning or solvency problem has appeared, stop treating the file as an ordinary refinance. Use the funding-stopped guide and involve the appropriate legal or insolvency adviser before adding debt.
What is a standstill, and what changes once a demand issues?
A standstill is an agreement in which the lender holds off exercising its rights for a defined period while you do defined things by defined dates, and the single most important thing to understand about it is that it is an agreement rather than a right you can insist on. Forbearance is the same idea under a different name, used more often when the concession is a change to the payment terms rather than a pause on enforcement.
These two words are worth learning precisely because nobody explains them to borrowers. They are the vocabulary lenders, their lawyers and their credit committees use among themselves, and they appear in the documents you will be asked to sign, but almost no borrower-facing page defines them. When a lender says it is "prepared to stand still while you get the refinance away", it is describing something specific: a short, conditional, documented arrangement with an end date.
A workable standstill has four parts. It has a defined period, usually short, measured against a milestone rather than an open horizon. It has defined conditions: an executed term sheet by a date, a valuation instructed by a date, a sales campaign launched, a shortfall funded, information provided. It has an express reservation of rights, meaning the lender is not giving anything up permanently and can resume where it left off if the conditions are missed. And it usually has a cost, in fees, in legal expense and in the interest that keeps accruing throughout. What it buys you is time with a shape to it, which is the only kind of time that is useful when a facility is already past its date.
It is also worth understanding that forbearance is not free to the lender either, which is why it is granted on conditions rather than goodwill. Australian prudential standards define a restructured exposure as one where the borrower is experiencing financial difficulty or hardship in meeting its commitments and the lender grants a concession it would not otherwise consider, and they define a non-performing exposure by reference to default, including unlikeliness to pay. Where an exposure is already non-performing, a restructure does not clean it up: the standard requires it to continue to be classified as non-performing, and exit from that classification requires a probation period during which payments are made when they fall due and the underlying financial difficulty is resolved. That is the lender's own prudential classification of its exposure. It is not a description of your legal rights and it is not a cost charged to you. Source: Australian Prudential Regulation Authority, Prudential Standard APS 220 Credit Risk Management, definitions at paragraph 13 and the restructuring requirements at paragraphs 98 to 103. Operative text read live on 26 August 2026.
Understanding that changes how you ask. A lender being asked to carry a restructured exposure indefinitely, with no dated path to repayment, is being asked to accept a classification it will have to explain internally for as long as the exposure sits there. A lender being asked for a defined period against a defined exit is being asked for something it can approve. If you are close to needing one of these conversations, it is worth running the completion funding search in parallel, so the standstill has an exit to point at rather than a hope.
Everything above assumes no formal demand has issued. That is the hand-off point for this guide. A demand or a default notice changes the legal posture, starts clocks that are not yours to control, and brings in remedies that sit outside a commercial negotiation. If that has already happened, once a demand has issued the options narrow, and the right reading is the guide written for that position, not this one. It is also the point to involve a solicitor rather than a broker first.
Does an expiring facility put a personal guarantee or the family home at risk?
Not by reaching the date, no. A maturity event makes the debt repayable by the borrowing entity; it does not by itself call on anyone's guarantee. What can change the position is a demand, and what a demand allows is set by the documents that were signed at the start rather than by anything on this page.
The reason it is worth raising early is that development facilities are commonly written to a single purpose entity, with directors' guarantees sitting behind that entity, and in some structures with additional security registered over property outside the project. A guarantee is a separate contract with its own terms, its own limits and its own triggers, and those terms vary widely. Two facilities that look identical on the front page can behave completely differently here.
The practical step is the same in every version of this: have your solicitor read the guarantee and any additional security before the conversation with the lender, not after it. It is the one part of the file that reaches past the project, it is the part borrowers most often have not re-read since settlement, and it is the part that decides how much room you actually have in a negotiation. If a demand has already issued, that reading stops being preparation and becomes urgent.
| What the document decides | What to look for | Why it changes your position |
|---|---|---|
| Whether it is limited or unlimited | A cap expressed as an amount or a proportion, or no cap at all. | A limited guarantee sets the outer edge of the exposure. An unlimited one does not. |
| What debts it covers | Whether it is confined to this facility, or written to cover all present and future money owed by the entity. | An all obligations wording can pick up facilities the guarantee was never discussed for. |
| Whether security backs it | Whether a mortgage or caveat is registered over a residence or another asset outside the project. | A guarantee on its own is a promise to pay. A guarantee supported by registered security is a promise attached to a specific asset. |
| Who else is bound | Whether co-directors or other parties are jointly and severally liable. | Joint and several wording can mean one guarantor is pursued for the whole amount rather than a share of it. |
| What triggers it | Whether demand on the borrowing entity is required first, and what notice, if any, a guarantor receives. | This is what decides whether you get any warning at all. |
| What an extension does to it | Whether the guarantee automatically follows a varied or extended facility, or has to be re-signed. | This is the row people miss when they sign an extension to make a date go away. |
| What ends it | What has to happen for the guarantee to be released, and whether release is automatic on repayment. | Guarantees can survive events that people assume brought them to an end. |
One warning about researching this yourself. Searches on guarantees and the family home return consumer guarantor material almost immediately: bank guarantor information sheets written for a parent helping a child buy a home, family security guarantee product pages, and hardship resources for household borrowers. None of that describes a director’s guarantee behind a commercial development facility, and the protections and notice periods it sets out may not apply to yours. It is close enough in language to feel reassuring and far enough in substance to be wrong.
How long before expiry do you need to start?
You need to start early enough that the last item on the critical path can still finish before the expiry date, which means the honest answer is a method rather than a number: fix the date, work backwards through the steps, and find the point where the first one has to begin. Every competing page describes the product. Almost none of them tells you when to pick up the phone.
Working backwards is not a presentation device. It is the only way to get a true answer, because some workstreams can overlap and others cannot. The valuation and quantity surveyor work may progress in parallel, but formal credit commonly needs both the lender-accepted value and the verified cost-to-complete position. Legal documents depend on credit being far enough advanced to document, and the final payout and discharge sequence depends on a real settlement path. Compress one dependency and the delay often moves to the next link.
The timeline for a commercial development is materially longer than the figures circulating for residential lending, and the difference is not marginal. Three claims made elsewhere are worth naming, because they are the ones most likely to reach you first and all three are about a different product:
- The eight to twelve week start window. This is a residential refinance figure. It is asserted on pages about owner-occupied and investment home loans, where the security is a completed dwelling that a valuer can inspect and value in an afternoon. A part built development has no such shortcut.
- The four to eight week application. Same origin, same problem. It assumes a document set the borrower can produce themselves. On a part built site most of the document set is produced by other people, which section 5 sets out, and their availability is not something you control.
- The idea that the loan simply rolls to a standard variable rate at expiry. This one is not a timing claim at all, and on a development facility it is wrong. There is no standard variable rate to roll to. A development facility does not convert to an ongoing product at maturity. It becomes repayable. The residual expectation that something will quietly continue is, in practice, the single most expensive misunderstanding on this topic.
We do not publish a number of weeks as this page's own answer, and that is deliberate. The honest position is that the required lead time is set by your project's slowest dependency, not by an average, and that any figure printed here would be read as a promise. What we will own is the sequence and where it breaks. The refinance critical-path table below sets out the order and, more usefully, what each step cannot start until. Run it against your own expiry date and the answer falls out. One dependency in particular catches people out repeatedly, which is that a payout figure requested on the morning of settlement is not a formality, and an outgoing lender under no time pressure has no reason to treat it as one.
| Step | Who does it | What it cannot start until | What goes wrong here |
|---|---|---|---|
| Decide the exit: extend, refinance or sell | You, with your broker and accountant | Nothing. This is the one step available immediately. | It is deferred while the site is worked on, and the decision is made by the calendar instead of by you. |
| Ask the existing lender for an extension | You, in writing, through your relationship contact | You have a dated path to repayment to attach to the request. | The request is made verbally and late, with no exit attached, so it reads as a request for time rather than a proposal. |
| Approach incoming lenders and obtain indicative terms | Your broker | There is a current cost to complete position and a clear picture of the security. | Terms are sought on stale numbers, then repriced later when the real position emerges. |
| Valuation on the part built site | A valuer instructed by the incoming lender | The lender has issued its instruction and the valuer has site access. | The valuation is instructed on the wrong basis, so the number that comes back does not answer the question the credit team asked. |
| Quantity surveyor report and cost to complete | A quantity surveyor appointed by the incoming lender | The builder has provided current pricing and the drawdown history is available. | The reconciliation against money already drawn does not balance, and the deal pauses while it is explained. |
| Formal credit approval | The incoming lender's credit function | Valuation and cost reporting are both in, not one of them. | Approval issues subject to conditions that themselves take weeks, so the approval date is not the finish line it looked like. |
| Legal documentation and security | The incoming lender's solicitors and yours | Credit approval is unconditional enough to document. | A title, easement, approval condition or guarantee issue surfaces that nobody looked for earlier. |
| Payout figure, settlement and discharge | The outgoing lender, with both sets of solicitors | Documents are executed and a settlement date is booked. | The payout figure arrives late, is higher than expected once fees and accrued interest are added, and settlement moves. |
From our broking, indicative, as at August 2026
What follows is qualitative. This is a distress-adjacent topic and we do not publish indicative timeframes, loan to value bands or approval rates against it, because a figure quoted here would be read as a rate you will get or a time you will be approved in, and neither is something anyone can promise on a part built site. What we can describe is the pattern, from the broker's seat, across facility expiry conversations we have been in.
What separates an extension a lender grants from one it declines.
- Whether the borrower arrived before the expiry date or after it. This is the single strongest divider we see, and it is not about goodwill: before the date the lender is being asked to continue something, and afterwards to restart it.
- Whether the quantity surveyor and the builder are both still engaged. A project where both are still on the job is a project with a cost to complete that can be verified. A project where either has walked is a project where nobody can say what finishing costs.
- Whether the request comes with a dated path to repayment attached, rather than a request for more time. A lender can approve a defined period against a defined exit. It struggles to approve an open one.
What an incoming lender wants to see, and roughly in what order. First, what the security is worth today on the basis the lender will actually rely on. Second, what it costs to finish and whether that figure reconciles with the money already drawn. Third, who is finishing it and whether they are contracted to. Fourth, what repays the loan and whether that is documented. Fifth, and only then, the borrower's own position. Borrowers usually present that order in reverse.
What gets these deals declined. A builder who will not re-sign. A quantity surveyor report that will not reconcile with the drawdowns already made. Presale contracts sitting past their sunset date. A valuation instructed on the wrong basis, so it answers a question the credit team did not ask. An approval condition discovered late, which is the two clocks problem set out further down this page and a more common cause than most developers expect.
What changes once a formal demand has issued. The negotiation stops being commercial and becomes procedural. Timeframes are set by the notice rather than by the parties, the lender's internal file moves to a different team with a different mandate, and the range of outcomes a broker can influence narrows sharply. That is why the arrival triage at the top of this page routes that situation off this page entirely.
Based on deals we have placed and conversations we have been in, as at August 2026. Qualitative only. This is not a quote, not an offer and not a statistic, and it is not a prediction about your project. Actual terms and outcomes depend on lender policy and your circumstances at the time of application. Not financial advice.
What does an incoming lender need, and what depends on what?
An incoming lender needs a current valuation, a verified cost to complete, a contracted builder, a documented exit and clean title and approval position, and the reason a refinance on a part built site takes as long as it does is that those items form a dependency chain rather than a checklist.
A checklist can be worked in any order by anyone. A dependency chain cannot. Read down the dependency column of the incoming-lender table and the shape of the problem is visible immediately: almost nothing on the list is produced by you. The valuer is instructed by the lender. The quantity surveyor is appointed by the lender. The drawdown history sits with the outgoing lender. The programme and the pricing come from the builder. The approval record sits with the consent authority. Your role is largely to make other people's work possible and to make it happen in the right order, which is a very different job from filling in an application.
The item that most often sets the pace is the cost reporting, because it depends on two parties who have no particular incentive to be quick: the builder, who has to price the remaining work, and the outgoing lender, who has to release the drawdown history against which the new report will be reconciled. It is worth reading what the quantity surveyor certifies before you commission anything, because a report prepared for the wrong purpose is a delay, not a document. If the term itself is new to you, the quantity surveyor entry in the glossary covers the role.
The incoming-lender table states dependencies, not durations. We do not publish a number of days against any of these steps, for the same reason section 4 gives: the honest variable is your project's slowest link, and a printed average would be read as a commitment. What the table does give you is the order in which to start things, which is the part you can actually control when you are looking for funding to complete the project.
| What is required | Who produces it | Depends on | Why the lender wants it |
|---|---|---|---|
| Current valuation on the basis the lender will rely on | A valuer on the incoming lender's panel | The lender's instruction, the valuation basis being specified correctly, and site access | It fixes what the security is worth today, which is what the lender can actually recover inside its own term. |
| Cost to complete report, meaning the verified cost of finishing the remaining work | A quantity surveyor appointed by the incoming lender | Site inspection, current builder pricing and the contract position | It sets the size of the facility. Everything else is scaled to it. |
| Reconciliation of the cost report against drawdowns already made | The same quantity surveyor, using the outgoing lender's records | The outgoing lender releasing the drawdown schedule and supporting claims | It answers the question that actually decides the deal: was the money already advanced spent on this building. |
| Building contract, executed variations and the current programme | The builder, with the borrower | The builder still being engaged and willing to continue on the same or agreed terms | A price and a date are only meaningful if someone is contractually bound to deliver them. |
| Builder due diligence, including licensing and financial standing | The incoming lender, using information from the builder | The builder cooperating with a party it has no contract with | The exit depends on the builder finishing. A builder under strain is the lender's risk as much as yours. |
| Presale contracts, deposit records and the deposit holding arrangements | The selling agent and the borrower's solicitor | Contracts still being on foot and deposits being properly held | Qualifying presales are usually a condition of the facility, and they are part of how the loan gets repaid. |
| Development approval, its conditions, and any modifications | The consent authority's record, obtained through your planner or solicitor | The approval being current and the built work matching what was approved | An approval problem changes what the site can lawfully become, which changes what it is worth. |
| Insurances, including contract works and public liability | The builder and your insurance broker | The builder's engagement being current and cover not having lapsed during a pause | An uninsured part built structure is not security a lender will take. |
| Payout figure and discharge authority from the outgoing lender | The outgoing lender | A formal request, and everything above being far enough advanced to book a settlement | It is the last dependency in the chain and the one with the least slack in it. |
Rollover, refinance, completion finance or development exit: which one are you actually asking for?
People arrive at this problem using the words they picked up from whoever mentioned it first, and those words are not the words a credit team uses. That matters here more than it usually does, because two of the terms in circulation describe a completely different situation from an unfinished build, and asking for the wrong one wastes the days you have least of. The table below translates in both directions.
| What you might be searching | What a lender calls it | What it actually is | Where it is answered |
|---|---|---|---|
| roll my development loan over, loan rollover, rollover a construction loan | An extension or a variation of the existing facility | The same lender agreeing to a new date on new terms. It is a credit decision, not a renewal button. | Extension decision |
| refinance a half built development, get out of my current lender | A refinance or a takeout | A new lender repaying the existing one and funding the balance of the works, on what the project can prove today. | Incoming lender requirements |
| finish my build, money to complete, completion finance, construction completion finance | Funding the cost to complete | The same refinance question, decided by a verified cost to complete reconciled against the drawdowns already made. | Cost to complete |
| development exit finance, residual stock | A facility taken after the building is finished | A different problem from this one. It is generally used once construction is complete and the remaining issue is stock that has not sold yet, not works that have not been built. | Residual stock after completion |
| incomplete construction finance, incomplete project loan, unfinished build loan, unfinished development refinance, part-built development finance | A refinance of part built security | The same transaction as a refinance, marketed under a different name. Nothing about the wording changes what the lender tests. | Incoming lender requirements |
| private lender for an expired loan, non-bank construction lender, who lends on a stalled site | Private credit or a non-bank facility | A funding source rather than a product. Whether it fits depends on there being a defined exit and a short funding period to it. | Extension decision |
What happens after a mid-build refinance settles?
Settlement pays out the outgoing facility, but it does not finish the rescue. The incoming lender now controls the remaining advances under a new monitoring and drawdown process, the builder has to continue or re-mobilise on the programme the lender accepted, and the quantity surveyor or other monitor keeps testing progress against the verified cost to complete. Approvals, insurance, variations and the final sale or refinance exit all stay live from settlement day.
- Payout and security change: the outgoing lender is repaid and releases the agreed security as the incoming lender takes its documented position.
- Builder re-mobilisation: the continuing or replacement builder restarts under the contract, programme and insurance position accepted by the new lender.
- Monitored drawdowns: each further advance is subject to the new facility conditions and progress evidence. A refinance does not turn the undrawn balance into unrestricted cash.
- Completion and certification: practical completion, approvals, defects, the occupation or completion certificate where applicable, and handover documents have to reach the standard required by both the facility and the intended exit.
- Exit management starts immediately: completed sales, residual-stock funding or the longer-term refinance that repays the rescue facility should be managed from settlement, not left until the new maturity date is close.
The deeper post-settlement sequence is covered in what happens after an incomplete-construction refinance settles. Once this project is stabilised, the broader construction loan pack maps how to sequence future project facilities before the next build reaches the same pressure point.
What is a half-built site actually worth to a lender?
To a lender being asked to repay an expiring facility, a half-built site is worth what it could realistically be turned into cash for in its current state, inside that lender's own term, and not what it will be worth once it is finished. That single shift is the whole of this section, and it is where most feasibility conversations and most refinance conversations stop meeting.
A forward-looking number stops helping the moment a date is fixed. At the start of a project, the numbers that matter are the ones looking ahead: the as-if-complete value, sometimes written as the as if complete value, and the gross realisation value (GRV) of the finished product. Those are the right numbers for the question being asked then, which is whether the project is worth doing. But both describe a building that does not exist yet, and both assume the building gets built. A lender writing a facility to repay another lender's expiring loan is answering a different question: if this does not finish, what is here now, and can I be out inside my term. That question pushes weight onto the as-is value, and in the harder cases onto the forced sale value, of a structure that cannot yet be occupied. If you want the version of these numbers as they are built at the beginning rather than at the end, how the approval numbers are built at the start covers it, and how development finance is structured from the start covers the structure they sit inside.
Forced sale value, defined once: the amount a property might reasonably be expected to realise if the seller is under a constraint that shortens the marketing period or otherwise forces the sale, rather than selling in the ordinary course on ordinary terms. It is not a discount someone applies for effect. It is a different question, asked because the seller in the scenario is not choosing the timing.
The band drop is real and it is worth naming plainly. The lending percentages circulating for a normal development site sit materially above the percentages the same sources put against a part built one. We are not printing either band, because none of the circulating figures has a primary source behind it and every one of them is somebody's marketing. What is worth understanding is why the gap exists, because the reason is structural rather than punitive. A part built structure is harder to sell than either a vacant site or a finished building, because the buyer is inheriting somebody else's contract, somebody else's workmanship and somebody else's approval conditions. Its value is more sensitive to how long the sale takes. And the lender pricing that risk is doing so at the exact moment the borrower has the least time. Percentages fall for all three reasons at once. If the concept itself is unfamiliar, the loan to value ratio entry sets out how the ratio is used in property lending.
The two-test rule is the part nobody explains, and it is what actually binds at expiry. Development lenders size a facility against two separate tests and advance on whichever produces the lower number. One is a value test, measured against what the security is worth, which is the loan to value ratio. The other is a cost test, measured against what the project costs to deliver, which is the loan to cost ratio measured against total development cost (TDC). At the start of a project the cost test usually binds, because the site has just been bought at cost and the value has not moved. At expiry, the cost test is often the one that has quietly broken, because the costs already incurred include capitalised interest, holding costs, extension fees and rework that produced no additional building. The result is a project where the value test might still support the debt while the cost test no longer does, and a borrower who cannot understand why a lender is talking about a shortfall on a site that seems to be worth enough. Which test binds, and why, is the first thing to establish before you go looking for a solution to the wrong problem.
What if the new valuation or refinance amount is too low to clear the payout and finish the build?
If the incoming facility cannot cover the outgoing payout, the verified cost to complete and the transaction costs needed to reach the new exit, the refinance has a capital shortfall. It does not settle simply because the project has equity on an as-if-complete basis. The gap has to be closed on the as-is numbers the incoming lender is actually using.
The realistic paths are narrower than they look. Fresh equity can close the gap directly. If the existing senior lender is willing to remain, a permitted junior layer such as mezzanine finance or a second mortgage may fund a defined completion shortfall; the second-mortgage guide explains when that can and cannot work. If the gap came from unpaid progress claims or subcontractors, undocumented variations, defects, re-mobilisation or replacement-builder costs rather than the maturity itself, the development cost-overrun funding paths compare the capital options. A reduced scope, sale or other restructure only works where the planning, building contract, lender and economics permit it. If the company cannot pay debts as they fall due, this has moved beyond a normal funding shortfall: insolvency advice and advice on the directors' duties come before new borrowing.
Can you sell a half-built development if the refinance does not work?
Yes, a part-built development can be sold, but the buyer prices the site as it stands and takes on the remaining construction, approval, builder and market risk. That means the relevant evidence is the current as-is value, verified cost to complete, condition of the works, approval position, title, presales and what security has to be released at settlement, not the original gross realisation value in the feasibility.
A sale is not automatically the cheapest exit, and it is not automatically available on your preferred timing. Before treating it as the fallback, have the selling agent or valuer test the market for the part-built asset, have your solicitor review the building contract, presales, title and lender security, and have your accountant or tax adviser model the transaction consequences. If a receiver has been appointed, a mortgagee sale is being prepared, or another enforcement process is already running, that is no longer an ordinary developer-led sale: the lender's rights, the receiver's role and the sale timetable need legal advice, and the funding-stopped guide is the better starting point for that branch. The point of testing a sale early is not to give up on the refinance; it is to know the real floor under the project before the calendar chooses it for you.
| What the valuer is looking at | What lifts the number | What cuts it |
|---|---|---|
| Stage of construction | Lock-up achieved, so the structure is weathertight and the remaining work is predictable. | Work stopped, the site demobilised, and no clear date for restarting. |
| The builder | A builder still contracted, still licensed and willing to continue. | The builder gone, in dispute, or unwilling to re-sign at the old price. |
| Cost to complete | A current cost to complete that reconciles with the drawdowns already made. | Drawdowns that cannot be reconciled to work in place. |
| Presales and deposits | Presale contracts on foot, with deposits properly held. | Presales lapsed, rescinded or past their sunset date. |
| Approval and built form | An approval that is current, unconditional in the parts that matter, and matched by what has actually been built. | An approval issue, a lapse risk, or built work that does not match the approved plans. |
| Title and encumbrances | Clean title, with easements, covenants and staging already resolved. | Easements, covenants or staging still unresolved at title. |
| Condition of the works | Work in place that an incoming builder will accept, on a structure that has not been left open to weather. | Defects or non-conforming work that a new builder will price defensively, or weather exposure long enough that remediation is now part of the cost to complete. |
| Market for the product | A product the local market is still buying. | A product aimed at a segment that has moved. |
The practical use of that table is not reassurance. It is a list of the things that are still inside your control while the facility is running, and mostly outside it once the facility has expired.
Who verifies the cost to complete, and why does it decide the deal?
A quantity surveyor appointed by the incoming lender verifies the cost to complete, and it decides the deal because it is not a calculation at all: it is a reconciliation against the money already drawn, and that is where these transactions fail.
Every source that explains cost to complete describes it as a sum. Take the total cost, subtract what has been spent, and the remainder is what finishing costs. In practice the incoming lender is asking a harder question, and it asks it in two parts. What does the remaining work cost, at today's prices, with the builder who will actually do it? And does the work standing on the site today account for the money that has already been advanced against it? The second question is the one that stops deals, and almost nothing written for borrowers mentions it.
The appointment matters as much as the answer. The incoming lender appoints its own quantity surveyor and instructs them directly, and it will not take the outgoing lender's most recent report unquestioned. That is not a comment on the previous consultant's competence. It is that a report prepared for a different lender, on a different instruction, at an earlier point in the programme, was answering a different question. In practice the outgoing report is used as a comparison document rather than as evidence, and any gap between the two reports becomes a question you have to answer.
What a reconciliation that will not balance actually looks like is worth describing, because it rarely looks like fraud and it usually looks like ordinary project drift. Progress claims certified against a programme that has since changed. Variations agreed on site and never formally documented. Materials paid for in advance and not yet installed, or delivered and stored off site. Preliminaries and site overheads that ran for longer than the programme assumed and were drawn as they accrued. Capitalised interest and fees that were funded out of the facility and are now part of "spent" without being part of "built". Each is explainable on its own. Together they produce a gap between money advanced and value in place, and the incoming lender has to price that gap before it can lend against it.
It also matters that the cost lines behave differently from one another. Hard costs, the physical construction, are the most verifiable and the most likely to be re-priced upward by a new builder. Soft costs, meaning consultants, approvals, legal and marketing, are largely sunk and produce nothing further if the project stops. Holding costs keep accruing whether or not anyone is on site, which is section 11's subject. Contingency is the line that tells the lender the most, because a project that has consumed its contingency before completion is a project whose remaining budget has no absorption left in it. Where the numbers land short, funding a shortfall behind the senior facility sets out the paths that exist, and where the overrun is contested rather than accepted, a mid-build cost overrun you did not agree to is a different problem with a different remedy.
What happens to presales and deposits when the build runs long?
When the build runs long, presales that fall away hit your facility before they hit your sales campaign, because qualifying presales are usually a condition of the loan itself rather than just a source of repayment. That join is the one almost nobody makes, and it is the reason this section exists.
Start with the purchaser, because the purchaser's position is what constrains yours. Someone who exchanged off the plan is holding a contract with a long stop date in it, a deposit tied up for the duration, and a set of circumstances that may have moved considerably since they signed: their own finance approval, their own price expectations, and their own patience. Their rights, and how the sunset date operates on the contract, are governed by legislation that differs by jurisdiction and is not this page's subject. What the sunset date does to the contract itself is covered separately, and if that is your live problem it is a question for your solicitor before it is a question for a lender.
What matters here is what happens to the facility. Qualifying presales are a lender condition, and losing them can be a review event in its own right. A development facility that was approved on the strength of a presale threshold usually carries that threshold forward as an ongoing obligation, not merely a drawdown condition satisfied once at the start. Contracts that rescind, lapse or are terminated reduce the count. If the count falls below the threshold, the lender may be entitled to re-test the facility even though every payment has been made and the term has not expired, which is precisely the mechanism section 2 describes. A developer who is watching the maturity date can therefore be re-tested months earlier by a presale problem they were treating as a sales problem.
The knock-on effects run further than the count. Presales support the exit that repays the loan, so losing them weakens the repayment case at the same moment it triggers the review. They also inform the valuer, because contracted sales are direct evidence of what the finished product achieves in this market. And they affect the cost side, because a re-launched sales campaign is a marketing cost that arrives when the budget has least room for it.
What re-signing or re-pricing presales does and does not solve. It can restore the count, which addresses the covenant. It can restore evidence of demand, which helps the valuation. What it does not do is restore the original economics: a contract re-signed at today's price on a project that has run long is usually a lower number than the one it replaced, and it resets nothing about the time already lost or the interest already capitalised. Re-signing is a repair to the condition, not a repair to the feasibility. It is worth doing for the covenant and worth modelling honestly for the exit.
Can the New South Wales Pre-sale Finance Guarantee help a stalled project?
The New South Wales Pre-sale Finance Guarantee can help a project reach the presale level a lender requires so that construction can start, and it is not designed as a rescue facility for a project that has already passed its expiry date. That limit is worth stating before the terms, because the scheme is being discussed widely and the gap between what it does and what a stalled developer needs is easy to miss.
The mechanism is straightforward. Rather than lending money, the New South Wales Government commits to purchasing off the plan dwellings in an eligible development, so that the developer can satisfy a lender's presale requirement and get finance drawn. The commitment sits on the presale side of the problem, at the point where a project is trying to begin, and eligibility is written around that: the applicant is expected to hold indicative finance approval that carries presale requirements, to have planning and development approval in place, and to be able to achieve substantial commencement of construction within six months. A project whose facility has already expired mid-build is, by definition, past the point the scheme is aimed at.
That said, it is directly relevant in two situations that touch this page. A project that has not yet drawn, and whose approval or indicative finance is aging while it chases presales, is exactly the intended case. And a developer working out the sequencing on the next stage of a staged project, while the current stage is under time pressure, may find the scheme relevant to the stage that has not started rather than the one that has.
The Pre-sale Finance Guarantee, as published
- A $1 billion revolving fund, running from October 2025 to September 2030 The New South Wales Government commits to purchasing off the plan dwellings in eligible residential developments so a developer can meet a lender's presale requirement. It is a purchase commitment, not a loan and not a guarantee of your finance. Source: New South Wales Department of Planning, Housing and Infrastructure, Pre-sale Finance Guarantee. Page last updated 3 August 2026, read 26 August 2026.
- Eligibility conditions travel together and all of them apply The development must be in New South Wales and must include at least four homes. The developer must hold indicative finance approval from a lender that carries presale requirements, and must have planning and development approval secured. Substantial commencement of construction must be achievable within six months. Individual dwellings are capped at a commitment value of $2 million, or $2.5 million for homes with three or more bedrooms. Source: New South Wales Department of Planning, Housing and Infrastructure, Pre-sale Finance Guarantee, terms and conditions. Read 26 August 2026.
- How much of the presale requirement it will cover depends on the size of the project Up to 50 per cent of dwellings for projects of 20 or more homes, capped at $50 million per project. Up to 75 per cent for projects delivering fewer than 20 dwellings, capped at $30 million. For affordable dwellings delivered by a registered not-for-profit community housing provider, up to 100 per cent, capped at $30 million per project, with $80 million available under that limb at any single point in time. The earlier minimum project value was replaced in June 2026 with the four home requirement. Source: New South Wales Department of Planning, Housing and Infrastructure, Pre-sale Finance Guarantee, and the New South Wales Government announcement of the expanded program, 11 June 2026. Read 26 August 2026.
General information only. Figures are indicative where marked and current as at the review date shown. Program terms are set by the New South Wales Government and can change; confirm current terms and eligibility with the department before relying on them. Not financial advice; consider your own circumstances and speak to a broker.
One point on presale requirements generally, because it is moving and it is easy to read a proposal as a rule. The prudential regulator is currently consulting on changes to bank capital rules for development and construction lending, and the proposals include adjusting the criteria so that more exposures qualify for the lower risk weight on residential property development, which is the test that the qualifying presale condition sits inside. That is a proposal under consultation. It is not a current rule, nothing in it has commenced, and the qualifying presale condition as it stands today is unchanged. The consultation was published on 29 June 2026, and the regulator states that it intends to finalise credit risk capital changes in the second half of 2026 for a proposed effective date of 1 April 2027. Re-checked live on 26 August 2026. Treat any commentary describing a new presale level as current as describing a proposal. Source: Australian Prudential Regulation Authority, APRA consults on changes to bank risk weights designed to support lending and productivity, published 29 June 2026. Read 26 August 2026.
If your project is short of the presale threshold and the scheme does not fit, the underlying question is a lending question rather than a scheme question, and a development without qualifying presales sets out how that is approached.
Is it your finance or your approval that is expiring?
There are two clocks running on a stalled site and they are not the same clock: your development facility expires under a contract you signed with a lender, and your development approval lapses under planning law administered by a consent authority, and neither one has any power to extend the other. Establishing which one is actually binding is the first move, because the wrong answer sends you to the wrong professional.
The confusion is not the reader's fault. Search results for facility expiry and approval expiry run together constantly, the same words appear in both, and on a site that has stalled the two clocks genuinely do run at once. But they are different instruments with different rules and different consequences. A facility is a contract: its expiry is a date the parties agreed, and the remedy is commercial, which is to say an extension, a refinance or a sale. An approval is a statutory consent: it lapses under legislation, the remedy is a planning process rather than a negotiation, and no lender can help you with it. Development approval in the glossary sets out what a consent contains and why its conditions matter.
There is no single Australian commencement test for keeping a development approval alive. The applicable rule depends on the state or territory, the approval type, its conditions and the date it was granted. Some regimes focus on whether qualifying physical work has commenced; others use different currency, commencement or completion triggers. Do not apply a national "substantial commencement" rule to your site. We do not publish a national lapse period here. Check the actual consent, the current legislation and the issuing authority with your planner or solicitor. The jurisdiction-specific finance consequences are covered in the guide to refinancing a site when the approval has lapsed or changed.
The reason this belongs in a finance guide is that an approval problem changes the site's valuation basis, and the valuation basis feeds straight back into sections 6 and 7. A site with a current approval is valued as a development site with a known permitted yield. A site whose approval has lapsed, or whose built work does not match what was approved, is valued on a more uncertain basis, because what it can lawfully become is now an open question. That reduction flows through the value test, which changes what a lender will advance, which changes whether the refinance that was going to repay the expiring facility is available at all. When the approval is the live problem, when the approval itself has lapsed or been amended is the guide written for it.
| The clock | What expires | What the consequence is | Who decides | Where to go next |
|---|---|---|---|---|
| The finance clock | The term of the development facility, on the maturity date written into the loan agreement. | The balance becomes repayable, further advances generally stop, and interest keeps accruing against a debt that is now due. It is not automatically a default. | The lender, exercising rights under a contract you both signed. It can be negotiated. | Sections 2, 3, 4 and 5 on this page, and the withdrawn funder guide if a demand has issued. |
| The approval clock | The development approval or planning consent, if it reaches the lapse or expiry trigger that applies to that approval under the relevant planning law and consent conditions. | The consent may no longer authorise the project in its current form. The planning position has to be confirmed first, and any resulting change to lawful yield or certainty can change the valuation basis and what a lender will advance. | The consent authority, applying legislation. It is a planning process, not a commercial negotiation, and no lender can extend it. | Your planner or solicitor and the consent authority first, then refinancing a site with a lapsed or amended approval. |
What does a stalled site cost you to hold?
A stalled site costs you the accruals that keep running while nothing is being built, and the largest of them is usually the interest on a facility that is now repayable rather than any of the outgoings people think of first. Nothing on the list below stops because work has stopped.
Interest continues to capitalise against a facility that is now due. On a development facility interest is generally funded out of the facility itself rather than paid monthly, which is efficient while the project is running to programme and corrosive when it is not, because the balance grows while the security does not. That is the mechanism that turns a short delay into an equity problem, and it is set out in more detail in the note on what the site costs you to hold.
Alongside it sit the outgoings that attach to the land regardless of activity: council rates, land tax where it applies, insurance including contract works cover that has to be maintained on a part built structure, site security and fencing, temporary services, and the site establishment costs that keep ticking over whether or not anyone is on site. Consultants who remain engaged during a pause continue to invoice. We do not publish a national holding cost figure, because there is not one. These vary by state or territory, by council, by land value and by the specifics of the site, and any single number would be misleading everywhere except the one place it came from.
Two jurisdiction-specific items are worth flagging because they have both moved recently and both bite hardest on exactly the position this guide describes, which is land sitting undeveloped for an extended period.
Victoria has a vacant residential land tax, and its scope was extended from 1 January 2026 to reach residential land in metropolitan Melbourne that has remained undeveloped over a long continuous period. This is a Victorian measure and, in the limb that concerns undeveloped land, a metropolitan Melbourne measure. It is never a national rule and it should never be read as one. The applicable rate and the qualifying period are set by the State Revenue Office of Victoria and are not stated here: the office's published pages could not be read by automated retrieval when this page was built, and we do not publish a tax rate we have not read at source. Confirm both directly with the State Revenue Office of Victoria, or through a registered tax agent, for your specific land. Source: State Revenue Office Victoria, vacant residential land tax. Extension to undeveloped land as at 1 January 2026. Checked 26 August 2026, rate and qualifying period not read at source and therefore not stated.
In Victoria, a builder's unpaid claims on a stalled site are also live under a changed security of payment regime. The amendments to the Victorian security of payment legislation took effect on 15 April 2026, and the responsible authority states that the changes affect all construction contracts, including contracts entered into before the amendments came into operation. For a developer whose site has stopped and whose builder has claims outstanding, that matters in two directions at once: it affects what the builder can pursue and how quickly, and it affects the incoming lender's view of the security, because an adjudicated payment claim against a project is a liability sitting in front of the exit. This is a Victorian regime and the position differs in other states and territories. It is a legal question for a solicitor, not a lending question. Source: Building and Plumbing Commission Victoria, changes to the Security of Payment Act, commenced 15 April 2026. Page last updated 30 June 2026, read 26 August 2026.
Holding costs are the reason the answer to section 4 is "earlier than you think". Every week spent deciding is a week of accrual against a project whose budget has already lost its contingency, and the options that are open at the start of that period are rarely all still open at the end of it. If the shape of the problem is now clear and the question is what can actually be funded, the development finance options page is the place to start.
What changes each week the position sits unresolved
Every week the position sits unresolved, six things move, and all of them move the same way. None of them is dramatic on any single week, which is exactly why the delay is easy to justify at the time and hard to explain later.
- Interest keeps accruing, and on most development facilities keeps capitalising, against a balance that is already repayable rather than one that is still being drawn.
- The valuation ages. An incoming lender wants a current one on the basis it will rely on, so the report you paid for early may not be the report that gets used.
- The builder's position hardens. Crews get moved to other jobs, remobilising costs something, and the price to finish is no longer the price that was agreed.
- Presale contracts move closer to their dates. Each one that falls away removes a lender condition and part of the exit at the same time.
- Approval and consent timeframes keep running on their own clock, which is not the loan's clock and cannot be extended by the lender.
- The field of lenders narrows, because every item above is a question the next lender has to price, and each one makes the file slower to say yes to.
The compounding is the point. A position that had three workable answers in month one often has one in month four, and the reason is rarely a single bad event. It is six small ones that nobody had a reason to act on individually.
An expiring development facility is a date, not a verdict. The debt becomes repayable, the undrawn balance generally stops being available, and interest keeps running, but nothing about the date itself is a default. What decides the outcome is when you start and what you can prove: an extension is granted to a request that arrives before the date with a dated path to repayment attached, a refinance is available from a narrower field of lenders on the strength of a current valuation and a cost to complete that reconciles, and a sale is priced against what is standing on the site rather than what was in the feasibility. The two mistakes that cost the most are treating the maturity date as the start of the process rather than its deadline, and solving the finance problem while the approval, the presales or the builder was the binding constraint all along.
Key takeaway: work backwards from the expiry date, establish which constraint actually binds, and start the conversation while the facility is still running rather than after it has stopped.Frequently asked questions about a development facility expiring
If a construction or development loan expires before the build is finished, the balance becomes repayable and the lender's commitment to advance the undrawn portion generally ends, but reaching the maturity date is not automatically a default. Three paths remain open from that point: an extension from the existing lender, a refinance to a new one, or a sale of the site or the finished product. Which of them is realistically available depends on how much time is left, whether the cost to complete can be verified, and whether the builder is still engaged. The practical sequence is set out in working backwards from the expiry date.
You can extend a development loan on an incomplete project, and extensions are granted regularly, but the request is treated as a fresh credit decision rather than an administrative one. The lender is deciding whether it is extending a loan or refinancing a worse one, so it re-tests the exit rather than only the borrower: whether the project can physically be finished in the time asked for, whether the cost to complete is verified, and whether what repays the debt is contracted or merely hoped for. Extension fees, review fees and revised line fees apply and are set deal by deal as lender policy rather than at a published rate. The cost that usually does the damage is interest capitalising to the expiry date.
Reaching the expiry date is not the same as defaulting. A maturity event is a scheduled date both parties agreed to at the start, and its effect is that the debt becomes repayable; a default is a breach of a term of the agreement, which can happen before maturity, after it, or not at all. The distinction matters in the first conversation, because a borrower who describes a maturity event as a default invites the lender to treat it as one. A third category, the review event, sits between them and lets a lender re-test the facility without the loan being in default at all, which is explained in what a lender looks at on an extension request.
Generally no. A facility limit is a commitment to advance while the facility is on foot and while the drawdown conditions are being met, so once the term has ended the commitment to advance further funds ordinarily ends with it, even where the limit was never fully drawn. This surprises more developers than any other feature of an expiring facility, because a project relying on the remaining tranches to reach completion can find the money gone while the debt is not. The position is governed by your own loan agreement, so it is a question for your solicitor and your lender rather than a general rule, and it is one reason the guidance in what actually happens on the expiry date is to arrive before the date rather than after it.
Start early enough that the last item on the critical path can still finish before the expiry date, which means working backwards from the date rather than forwards from today. We do not publish a number of weeks, because the required lead time is set by your project's slowest dependency and a printed average would be read as a promise. The residential figures circulating on this topic, including the eight to twelve week start window and the four to eight week application, are claims made about completed dwellings rather than part built development sites, and a development facility does not roll to a standard variable rate at expiry. The dependency chain that actually sets the pace, including a payout figure requested on the morning of settlement, is set out in the refinance critical-path table on this page.
A standstill agreement is an arrangement in which a lender holds off exercising its rights for a defined period while the borrower does defined things by defined dates. It is an agreement, not a right you can insist on, and a workable one has four parts: a defined period, defined conditions, an express reservation of the lender's rights, and a cost in fees and continuing interest. Forbearance describes the same idea, used more often where the concession is a change to the payment terms rather than a pause on enforcement. If a formal demand has already issued, the position has changed and once a demand has issued the options narrow.
They are two different clocks on the same site and neither can extend the other. A development loan expires under a contract you signed with a lender, so the response is commercial: an extension, refinance, repayment or sale. A development approval lapses or expires under the planning rules and conditions that apply to that specific consent. There is no single Australian commencement test that can safely be applied across every state, territory and approval type. Confirm the planning position with your planner or solicitor because uncertainty about whether the consent remains operative can change the site's valuation basis and what a lender will advance. When the approval itself has lapsed or been amended is the guide for that position.
Reaching the expiry date does not by itself put a house at risk, because a maturity event makes the debt repayable by the borrowing entity rather than calling on anyone personally. What can reach further is a guarantee, or additional security registered over property outside the project, and development facilities are commonly written to a single purpose entity with directors' guarantees sitting behind it. A guarantee is a separate contract with its own limits and its own triggers, and those terms vary widely between facilities, so the answer for your file is in your documents rather than in a general rule. Have your solicitor read the guarantee and any additional security before the conversation with the lender, which is set out in whether an expiring facility puts a guarantee or the family home at risk.
A narrower field than was available at the start, made up mostly of non-bank and private lenders whose credit policy is built around part built security rather than completed stock. Senior lenders running standardised policy rarely take on another lender's unfinished site, which is why the two answers circulating on this question contradict each other: they describe different parts of the market. What decides it is not the lender category but four things the project has to prove: a current valuation on the basis the lender will rely on, a cost to complete verified and reconciled against the drawdowns already made, a builder still contracted to finish, and a documented exit. The full document set, and the order it has to be produced in, is in what an incoming lender needs.
There is no standard figure, because the total is assembled from eight separate lines set by different parties, and the extension fee that gets quoted first is rarely the largest of them. The lines to add up are the lender's extension or review fee, any revised line fee, interest across the new term which capitalises on most development facilities, an updated valuation and a quantity surveyor cost to complete report which the lender instructs and you pay for, legal costs on both sides, any broker or arrangement fee, and the exit costs if the extension fails and you refinance instead. Whether each line is payable in cash or capitalised into a balance that is already repayable matters as much as its size, because a capitalised cost raises the number a new lender later has to refinance. The full derivation, line by line, is in what an extension actually costs.
Yes, a partly built development can be refinanced, by a narrower field of lenders than were available at the start and on terms set by what the project can now prove. The two answers circulating on this question contradict each other because they describe different lenders: senior lenders running standardised credit policies rarely take on someone else's part built site, while a smaller set of non-bank and private lenders is built around that risk and prices for it. What decides it is a current valuation on the basis the lender will rely on, a cost to complete that reconciles with the drawdowns already made, a builder still contracted to finish, and a documented exit. The full document set and its dependencies are in what an incoming lender needs.
If an off the plan buyer does not complete on time, the contractual consequences are governed by the contract and by legislation that differs between states and territories, and that is a question for your solicitor. The consequence this guide covers is what it does to your facility: qualifying presales are usually an ongoing lender condition, so a contract that rescinds, lapses or fails to settle reduces the count and can entitle the lender to re-test the loan even though every payment has been made and the term has not expired. It also weakens the exit that repays the debt and removes evidence the valuer was relying on. The contract side, including how a sunset date operates, is covered in what the sunset date does to the contract itself.
Sometimes, and it depends entirely on whether there is a real exit and a short bridge to it, rather than on the lender category. Private lenders are often the only part of the market that will look at a part built site, and the honest trade-offs are cost, shorter terms, tighter conditions and less room if the project slips again, which means a private facility works as a bridge to a defined event and works badly as a way of buying undefined time. It is also a market the corporate regulator has put under active scrutiny: its surveillance of private credit funds found inconsistent reporting, limited disclosure of borrower pricing and, in many funds, no detailed written policy for handling impairment and default, and poor private credit practices are a named enforcement priority for 2026, with property development flagged as particularly exposed. That is a reason to do your own diligence on any funder and to take advice, not a reason to rule the market out, and the alternatives are set out in what a lender looks at on an extension request.
Sometimes, though what people call a rollover is usually one of two different transactions. If the existing lender agrees a new date on new terms, that is an extension or a variation, and it is a fresh credit decision rather than a renewal. If a different lender repays the existing one and funds the balance of the works, that is a refinance, and private credit is often the part of the market willing to look at a part built site at all. Either way the decision turns on the same four things: a current valuation on the basis the lender will rely on, a verified cost to complete, a builder still contracted to finish, and a documented exit. The trade-offs of the private route, and the vocabulary that separates a rollover from a refinance, are in which one you are actually asking for.
Fact verification log
Every regulatory claim on this page was read against its live source when the page was built on 26 August 2026. The rows below record the claims that were deliberately not made, and why, so a reader can see what is missing and a reviewer can see that it was missing on purpose.
| Ref | Claim | Status at build |
|---|---|---|
| V1 | The operative definitions of restructured and non-performing exposures in the prudential credit risk standard. | Read at build and cited. The operative text was read on the Commonwealth legislation register on 26 August 2026, not from a stored paraphrase and not from the superseded regulator publication. Section 3 ships with the citation. |
| V2 | A proposed commencement date for the prudential consultation on development and construction risk weights. | Now stated by the source, and corrected here. When this page was scoped, no commencement date appeared on the consultation page. Read live on 26 August 2026, the regulator states it intends to finalise credit risk capital changes in the second half of 2026 for a proposed effective date of 1 April 2027. Section 9 states it as a proposal under consultation, not as a rule. |
| V3 | A development approval lapse period for any state or territory. | None verified. No day or year count ships. The periods differ by jurisdiction and by consent type, and an automated search on this topic was observed retrieving a repealed South Australian Act as though it were current. Section 10 names the concept and routes the reader to the consent authority. |
| V4 | Any extension fee, review fee, default interest or line fee figure on a commercial development facility. | No primary or secondary source exists for one. No such figure ships. These are set deal by deal as lender policy. Any number printed here would be an invention. |
| V5 | The rate and qualifying period for the Victorian vacant residential land tax as it applies to long undeveloped land. | Not read at source at build, so not stated. The State Revenue Office of Victoria's published pages returned navigation only to automated retrieval on 26 August 2026. Section 11 names the measure, its Victorian and metropolitan Melbourne scope and its 1 January 2026 extension, and routes the reader to the office and to a registered tax agent for the figures. |
| V6 | The debt to development cost and qualifying presale thresholds inside the residential concession to the development and construction risk weight. | Read at build and deliberately withheld. Both thresholds are stated in the prudential standard and were read on 26 August 2026. They are not printed here because a debt to cost percentage sitting on a page about an expiring facility reads as a borrowing limit, which is exactly what this page says does not exist as a published figure. Section 2 describes the concession and its tests without numbering them. |
| U5 | That a development facility borrowed by a company is outside the National Credit Code because the Code requires the debtor to be a natural person or strata corporation; where the borrower is an individual or strata corporation, the purpose test still matters. | Read at review and cited. ASIC states that the National Credit Code applies only where the debtor is a natural person or strata corporation and the purpose test is also met. The body wording now states the company-borrower rule directly, distinguishes individual and strata borrowers, and links to ASIC rather than relying on a generalisation. |
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