A New Way to Buy
There’s a quiet revolution happening on new home sites across NSW. And no, it’s not a new building material or solar innovation—it’s in the financing.
A growing number of builders are adopting “build now, pay later” finance models, with schemes like Homepay giving buyers the option to pause repayments during construction. For some families, this could be the only way to afford a new home right now. For others, it could represent a new wave of financial stress—deferred, not dissolved.
Let’s unpack what’s happening, who’s using it, and what it means for the building industry.
How It Works
Homepay, a scheme pioneered by property group Landen and now rolling out across North Homes projects, allows eligible buyers to:
- Pause mortgage repayments for up to 12 months during construction
- Avoid “double debt” like paying both rent and a new mortgage
- Defer interest, which is accrued during the pause and spread over the life of the loan
The interest rate starts at 5.55% for owner-occupiers with strong deposits—roughly on par with average home loans.
North Homes will offer the scheme across more than 125 house and land packages in suburbs including Oakville, Rouse Hill, Claremont Meadows, Marsden Park, and an upcoming release in North Kellyville.
For buyers in these estates, the pitch is simple: breathe easier while your home is built.
“Breathing Room” or Band-Aid?
Landen director Rashed Panabig says the concept came directly from buyer feedback.
“We’ve had a lot of direct conversations with buyers over the past year, and the same theme keeps coming up,” Panabig told News Corp.
“They want to build, but they simply can’t afford to carry a mortgage and rent, or two mortgages, at the same time.”
For buyers who are mid-transition—between selling one home and settling into another—or simply stuck renting while they build, it’s a powerful promise.
But there’s a catch. Like any deferral model, the pain doesn’t disappear—it just shifts. Interest still accrues. And in a market with stubborn inflation, delayed costs can snowball quickly.
Why Now?
This model isn’t new in retail—buy now, pay later is practically its own sector. But in home building? It’s a significant shift.
There are two main forces at play:
- Affordability Pressures: With rent at record highs and interest rates still weighing down borrowing power, many buyers are cash-strapped even before they sign a building contract.
- Stagnant Pipelines: Builders want more contracts on the books, especially for fixed-price house and land packages. Offering financial flexibility can boost demand in a sluggish market.
In that context, schemes like Homepay aren’t just customer-centric—they’re survival tools for builders chasing volume.
Where This Is Gaining Ground
While North Homes is the latest to roll this out, the model is starting to appear across multiple builders and developers. Expect it to become a standard inclusion—just like driveways or stone benchtops.
In growth corridors like Western Sydney and the Hunter, where house and land deals dominate, the appeal is even stronger. These are areas where many buyers are stretching themselves to get into the market, and where rental costs often exceed mortgage repayments.
Giving those buyers an on-ramp, rather than a cliff edge, could be the difference between closing the sale or not.
The Risk of Deferred Thinking
Still, some in the finance world are wary. While deferral options can relieve immediate cashflow stress, they rely on future financial stability—something far from guaranteed in 2025.
What happens if interest rates rise again?
What happens if someone loses their job between now and settlement?
And are buyers being adequately educated about the true cost of a deferred mortgage?
There’s also a risk that we begin to normalise kicking financial stress down the road—especially for first-home buyers already at risk of overextending.
Builders, Lenders, and the Fine Print
The builder-buyer-lender triangle has always had tension. Builders want speed and certainty. Lenders want credit quality. Buyers just want a home.
This new model complicates things slightly—especially if buyers misunderstand the difference between pausing repayments and avoiding interest. It’s also important to clarify that the “pause” usually applies to both the construction loan and the land component—critical for those purchasing in staged land releases.
North Homes and other participating builders must tread carefully to ensure their sales teams are educating, not just promoting.
A Smarter Option—or a Marketing Move?
There’s no denying this model will help some families who would otherwise be stuck. For couples renting and building, the ability to delay repayments could ease mental and financial strain.
But let’s also be clear: this isn’t charity. Builders win. Lenders win. And in some cases, that deferred interest can add tens of thousands to the long-term cost of the loan.
As always, the devil is in the detail.
The TGB Take
This is a smart product in the right hands—but risky in the wrong ones.
For builders, it’s a way to generate new leads and get contracts signed faster. For the industry, it reflects how creative financial engineering is becoming necessary to keep demand alive.
But here’s the real question:
Is this innovation—or a bandage?
We applaud any move that gives buyers breathing room and helps builders get to site faster. But we also urge builders to partner with financial advisors who can provide clarity and guidance—not just sales tactics.
Schemes like this should empower buyers, not just attract them. The industry has already seen what happens when financial risk is misunderstood at scale.
Done right, “build now, pay later” could be a bridge to home ownership for thousands.
Done poorly, it could become the next thing we’re all trying to regulate.
Author: TGB Editorial
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