Residual stock loans
Residual stock loans that repay your construction lender and release your equity
Refinance your completed, unsold units onto a loan built for selling, not building. Pay out the construction lender before it matures, take equity out for the next project, and sell the stock over 6 to 24 months at full price instead of at a fire-sale discount.
Get indicative terms
Tell us what is left to sell and when the construction loan matures. We come back with indicative terms in 24 to 48 hours. No obligation.
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When a residual stock loan fits
The build is done. The debt is due. The units are not sold.
A construction loan is sized and priced for a build. Most give you 60 to 120 days after practical completion before they mature, then the lender wants its money back. Presale settlements pay down part of it. The units still on the market do not.
A residual stock loan replaces the construction debt with a facility secured by the finished, titled units. It is priced below construction debt because the risk is lower, it usually capitalises its own interest, and it is repaid unit by unit as sales settle. You get the time to sell at full price, and where the numbers allow, cash back for the next project.
It is one part of the stack we arrange under development finance. If your situation looks like the list on the right, send us the numbers.
- Construction loan maturingInside 90 days, or already on an extension you would rather not renew.
- Presales have settledThe contracted units have paid down the facility and the balance is known.
- Units left to sellTypically a quarter or more of the project's end value. Below that, an extension may cost less.
- Titles registeredStrata plan registered and occupation certificate issued, so each unit can be mortgaged and released.
- A next project waitingEquity tied up in finished stock is equity not working on the next site.
The deeper read
What does unsold stock actually sell for?
Our guide sets out the discount bands reported in 2025 and 2026, what a completed unit costs to hold each month, and a full worked example. Read it before you decide to discount.
How lenders size it
Two valuation tests. The lower one sets the loan.
Lenders value the stock two ways and lend against whichever gives the smaller number. That is why the headline LVR and the loan you get are rarely the same.
Of summed retail values
Each unit valued as if sold on its own to an owner occupier or investor, then added up, net of GST.
Of the in-one-line value
What the whole pool would fetch sold to one buyer today. It usually sits 15 to 25% under the summed retail figure.
On a handful of units the two tests land close together. On larger pools the in-one-line test usually binds, and the effective LVR against retail value lands nearer 60 to 65%. The published non-bank band is typically 60 to 75%, and at least one published product includes the interest budget inside that limit. If the loan does not clear the construction debt, a mezzanine layer or a few more settlements can close the gap.
Worked example: eight unsold apartments
A completed 30-apartment project. 22 presales have settled. The construction loan matures in 75 days. Indicative only, not an offer.
| Line | Amount | Basis |
|---|---|---|
| Unsold units | 8 | Average retail value $850,000 each |
| Summed retail value | $6,800,000 | 8 x $850,000, net of GST |
| In-one-line value | $5,440,000 | 20% under the summed retail value |
| Test one: 70% of retail | $4,760,000 | Does not bind |
| Residual stock loan | $4,352,000 | Test two: 80% of the in-one-line value. The lower test sets the loan, 64% of retail |
| Construction debt outstanding | - $3,200,000 | Paid out in full on settlement day |
| Establishment fee | - $65,280 | 1.5% of the loan |
| Interest reserve | - $435,200 | 12 months at 10% p.a., capitalised and held back by the lender |
| Valuation and legals | - $35,000 | Estimate; varies with the number of titles |
| Equity released to you | About $616,000 | Paid at settlement, available for the next site |
| Release price per unit | About $598,000 | 110% of $544,000 allocated debt. The rest of each $850,000 sale, less selling costs, is yours |
Figures are rounded and illustrative. Unused interest reserve is not lost: if units sell early, the loan is repaid sooner and less interest accrues. Real terms depend on the valuation, the location, the sponsor and the sales evidence.
Indicative market bands, September 2026
Typical residual stock loan terms
Checked against published Australian non-bank product pages and lender guides. Indicative only and subject to lender assessment.
Of as-is value, net of GST. Major banks sit lower, typically 55 to 65%.
Published non-bank products start from about 8.2% at lower LVRs.
Higher LVR, faster approval, more flexible on the sponsor and the stock.
Plus valuation and legal costs. Some private lenders add an exit fee.
Often 12 months with an extension option. Some non-bank products run longer.
Capitalised on vacant stock. Serviced from rent where units are leased, at about 1.2 to 1.5 times cover.
Of the debt allocated to each unit, paid from each settlement. Most lenders sit at 105 to 120%.
Over the unsold titles, with directors' guarantees. Full recourse is standard.
Free equity release calculator
How much could your unsold stock release?
Estimate only and not an offer of finance. Applies the LVR to summed retail value; lenders also test the in-one-line value, which can lower the loan. Assumes a 1.5% establishment fee and a 12 month interest reserve at 10% p.a. held inside the loan. Excludes valuation, legal and selling costs. Get indicative terms for real numbers.
Get my real numbersWhat lenders want to see
The file that gets a term sheet
A complete file is the difference between a two week settlement and a missed maturity. We build it with you.
A current valuation
As-is values on each unit and on the pool in one line, from a valuer on the lender's panel. Most lenders order their own.
Sales evidence
Settled prices inside the project and recent comparable sales nearby that support the list prices on what is left.
Registered strata
Strata plan registered, titles issued, occupation and practical completion certificates in hand.
A marketing plan
Agent, campaign, asking price per unit and expected pace. Lenders usually stress it at one to two sales a month.
An exit timeline
When each unit is expected to settle inside the term, and what you will do if the market slows.
Payout and contracts
The construction lender's payout letter and maturity date, plus any exchanged contracts not yet settled.
Lenders also look at the sponsor. A track record of completed projects of a similar size helps, and residential strata in capital cities and major regional centres is the easiest stock to fund.
Your three options
Residual stock loan, extension or sell in one line
Applied to the eight-unit example above over a 12 month sell-down. Each route suits a different situation.
| Route | Typical cost | Cost on the example | Cash at settlement | Net once sold |
|---|---|---|---|---|
| Residual stock loanA quarter or more of the project unsold, and 6 to 24 months to sell it | 8 to 12% p.a.plus 1 to 2% establishment, non-bank | $320k to $535kfee, interest and costs; lower the faster units sell | About $616kequity released for the next site | $2.9m to $3.1mincluding the $616k, all eight sold at retail inside the term |
| Extend the construction loanA few units left and contracts close to settling | 11 to 14% p.a.construction rate continues, plus a 0.5 to 1% extension fee | $225k to $425konly if the lender will extend for a full year | Nilthe lender keeps the security and sets the timetable | $3.0m to $3.2mcheapest route when it is genuinely on offer |
| Sell in one lineYou need out now, or prices in the building are falling | 15 to 25% discountto the summed retail values | About $1.36mgiven up against retail, at a 20% discount | About $2.2mwithin weeks, before legals | About $2.2mno holding cost and no sales risk |
Assumes the residual loan at 10% p.a. capitalised, the construction loan extended at 12.5% p.a. with a 0.75% fee, and 2.5% selling commission on retail sales. The residual loan costs more in dollars than an extension because it is a bigger loan: it has already paid you about $616,000. Levies, rates and marketing apply to the first two routes and are not included. If your construction lender will genuinely extend for as long as you need, take it. Most will extend for weeks, not a year.
Honest risks
What can go wrong
The loan buys time, not margin
A residual stock loan only beats a discount if the units sell near full price inside the term. If they sit, the interest eats the gap you were trying to protect.
The in-one-line test can bind hard
On a large pool of stock, the loan may only just clear the construction debt, leaving little or nothing to release. Know the number before you plan the next site around it.
Full recourse is the default
Directors' guarantees are standard. If the stock sells for less than the debt, the shortfall is yours, not the lender's.
Sales covenants have teeth
Lenders set a sell-down timetable. Miss it and you face extension fees, pressure to cut prices, or default interest. Price the stock to the market, not to the feasibility.
Common questions
Residual stock loans, explained
What is a residual stock loan?
A residual stock loan is a short-term facility secured by the completed but unsold units in a development. It repays the construction lender in full, usually capitalises its own interest, and is paid down unit by unit as sales settle. It is also called development exit finance or completed stock finance. The point is time: 6 to 24 months to sell at full retail price instead of discounting to clear.
How much can I borrow against unsold stock?
Non-bank lenders typically lend 60 to 75% of the as-is value of the stock, net of GST. Banks sit lower, typically 55 to 65%. Lenders size the loan on the lower of two tests: about 70% of the summed individual unit values, or about 80% of the in-one-line value. On larger pools the second test usually binds, so plan on nearer 60 to 65% of retail value.
How is a residual stock loan repaid?
From sales. Each unit carries a release price, typically 100 to 120% of the debt allocated to it. When a unit settles, the lender takes that release price from the proceeds and discharges the title, and the rest comes to you. Because release prices sit above the allocation, the loan shrinks faster than the stock does, so the last units are close to debt free.
What does a residual stock loan cost?
Non-bank residual stock loans typically price at 8 to 12% p.a., with published products starting from about 8.2%. Private credit is typically 10 to 14% p.a. Establishment fees are typically 1 to 2%, plus valuation and legal costs, and some private lenders add an exit fee. Interest is usually capitalised into the loan, so there is no monthly cash drain while the units are vacant.
Can I release equity for my next project?
Often, yes. If the loan your stock supports is larger than the construction payout plus fees and the interest reserve, the difference is paid to you at settlement. Whether there is a surplus depends on how much debt is left and where the in-one-line valuation lands. Use the calculator on this page for a first read, then send us the numbers for indicative terms.
How quickly can it settle before my construction loan matures?
Typically 2 to 4 weeks from a complete file, and the valuation is usually the longest step. Some non-bank lenders settle within about a week of approval. Most construction loans give 60 to 120 days after practical completion before they mature, so start the refinance as soon as you can see stock will be left over, not in the final fortnight.