If you're building a new home a construction loan is the preferred option.

The major difference between a construction loan and a standard home loan is that a construction loan is usually drawn down in stages. Progress payments, or drawdowns, coincide with the initial purchase of the land followed by a number of key construction stages agreed between the lender and the builder.

This type of loan is ideal for building, as you only pay the interest on the loan amounts you have drawn down, as the building work progresses your lender will make progress payments to the builder at the key stages of the construction.