Financing your granny flat

Whether you’re hoping to make a little extra money from AirBnB; help your parents retire in comfort; or boost the overall value of your property, a modern granny flat can suit your needs and situation. Enquire now

Financing your granny flat

Building a granny flat in your backyard has never been more worth it.

But how do you go about getting a granny flat loan? What are the costs? Is it difficult? At Backyard Grannys, we want to make your end to end experience as easy and seamless as possible. Read on and learn everything you want to know about financing your granny flat.

How much does a granny flat cost?

When people think about building costs, they forget about things like site costs and council fees; while base building costs begin at $170,000, you’ll end up paying around $200,000 on average. Sometimes more, sometimes a little less. It really depends on what you want, where you live and the challenges of your property.

To learn more, check out our ultimate guide to granny flat prices.

Obtaining finance: how we can help

Every build has its own financial blueprint – your final loan depends on your current situation. Do you have any equity available? Will you need to refinance your home? Do you have any savings tucked away for expansions? Is your self-managed super-fund accessible?

Backyard Grannys have mortgage brokers, which we regularly work with, dedicated to finding the right finance deal to suit your budget. Our brokers are experienced in financing granny flats and homes and have access to over 30 institutions and banks, finding the best options so you can begin your build with confidence and clarity.

Granny flat finance - your options

There are three ways our clients commonly fund their granny flat costs. While our broker will find a solution that ticks your boxes, these options are the most straightforward – take a moment to learn a little bit more about them.

Equity: If you’ve been working hard to build equity in your home, our broker can leverage the amount. Say you need $150,000 and your house has rocketed in value – shooting from $400,000 to $550,000 – it may be possible to draw down the equity and finance your granny flat, increasing the value of your home.

Refinancing: Not enough equity? Our broker can help set you up with a traditional construction loan. You may need to refinance your current property, with the addition of the construction loan, unless you’ve paid off your home or investment.

As part of the construction loan financing method, you use a payment schedule: This means you only pay for the build according to its stages. There are two design and eight building milestones – upon the completion of each stage, you’ll be invoiced for an amount.

Who is eligible and how long does it take?

Before signing any contracts, Backyard Grannys recommends chatting with our broker first. You don’t need to be contracted already – we’d much prefer our clients begin their build with a realistic dream in mind. How a lending institution views you will depend on many things, like income, payment history, credit rating, expenses and examples of financial security.

How long does it take to obtain granny flat finance?

On average, you’re looking at around three weeks. The first one or two weeks will be spent gathering the financial details required by the chosen lending option – there is no one size fits all timeline, unfortunately. A single person with one bank account, a traceable history of pay slips and few existing commitments will have a different application than a self-employed business owner with a family trust, a few investment properties and multiple bank accounts.

Once all paperwork has been gathered, verified and submitted, lenders can usually approve a loan within five business days.

Are you excited to take the next step? Why not make an appointment with our broker and review your financial situation? Once you know your lending number, our expert team will match you with the right granny flat for your property.

Give us a call on 4947 2800 or fill in the form below.

Contact us today

Testimonials

"A big thank you to Backyard Grannys for my new abode. I found BYG on the internet and I can thoroughly recommend them to do the build. From the very beginning BYG have been very professional, easily contactable and easy to discuss the build with. The layout has taken everything into consideration that I will need now and into the future. Not to mention it has added considerable value to the property. A big shout out to Brett Tubnor, my project manager, who kept me updated and dealt with any questions I had in a timely and professional manner. Also to the staff in the office in particular Lynne, thank you. I have no hesitation in recommending BYG."

Victoria Driscoll

"Backyard Grannys were very professional, each step was explained clearly and all communication was easy to understand. Our site supervisor Brett was super organised, kept us informed of all progress and ensured all finishings were high quality. I would highly recommend Backyard Grannys."

Katherine Cody

"Backyard Grannys built our 2 bedroom Granny Flat, from the getgo we have had the BEST experience. They talked and walked us through the whole process and timings of when things would occur. We live 6 hours from where the building will be built, the communication was excellent and the upgrades we requested where done straight away, we made the colour selections over the internet which was just so easy, they called to confirm our selections and if there were any changes due to manufacturers issues they were onto us to let us know and a like for like products where used. The built was quicker than we expected and the handover occurred on the OCT long weekend, Graham walked us through the Granny and it is far better than we expected, the attention to detail and the quality is superb. Would I build with them again 110%. Do yourself a favour and check them out you will not be disappointed."

Craig Sharp

"We would like to say a very sincere thank you to all at Backyard Granny’s, we mean everyone starting with Alex Mitchell the Managing director of the company right through to the truck driver who cleans the yard. We were blessed to have found this wonderful company. From day one they made us feel so special and the advice, communication and support was beyond words. I have been involved in the building industry for over fifty years and have never found a company to go to such lengths to make sure we were kept up to date with every step of the build.The workmanship of the project from day one right through to the handover of the keys was beyond belief. It was easy to understand just how much Alex ( Managing Director) takes so much pride in his Backyard Granny’s Flats and how he has managed to make sure this flows so smoothly throughout his whole team which also includes his contractors. We also need to say a special thank not only to Alex but Aemelia McCorb Architectural Designer, Lynne Tarlinton, Lynne Smart Client Service Officer and Erin Murray Administrator. A special mention has to go to Graham Smith who was our Project Manager. Graham’s dedication and commitment to look after our build was outstanding and his commitment to make sure that every detail plus all communication was important to us as if he was building the flat for himself.Regards - Roy & Julie Leslie"

Julie Leslie

"Thank you to Grant, Caroline & Michelle for taken the time and patience to go through the details of the granny flat, Helpful friendly staff.We have now started the process of building a GF April 2023 will update at a later time.......Update - Building start date September 2023Update - So far very happy with the service and build will add photos after completion.And thank you Brett my Project Manager.Awning was my little touch.Another update: December 2024 building still as new with no issues and have added some photo that some people may have like."

Andrew

"Great service at BYG right from the start. Josh was very thorough with his quote and also recommend Axon cladding which was slightly different to the original cladding I wanted but the Axon cladding really made the granny flat stand out! Aemelia was really great and meshing the whole design together!Highly recommend talking to Josh for any of your granny flat ideas!"

Shannon Allen

"The whole team at Backyard Granny’s have been fantastic to work with. The contractors were each different but carried on their work requirements quite professionally. While at first the process seemed a bit stressful for me, I have to say that I couldn’t have picked a better team than Backyard Grannys - everyone was so easy to work with and nothing was too much trouble, with special thanks to the project manager Riley. I also want to thank the office staff too, especially Lynne, who was the best person to help guide me whenever I needed to ask questions. Overall I’m extremely happy with the end result and could not recommend them highly enough."

Anne Mitchison

"We could not be happier with our new Granny flat. BG’s was so supportive and provided the very best service imaginable from the first visit to the display, to getting the keys. Our Project manager Graham Smith is irreplaceable and made everything easy and efficient. The team were always available to listen and provide guidance and support when needed. Lynne is just the best and kept us up to date along the way. We could not have asked for more and would recommend the company to anyone."

Sarah-Jane Daniel

"After a rocky start with sales staff we were appointed brett tubnor as project manager from that first call from brett my mind changed about backyard grannys we had the pleasure working with brett and all he’s trades we found him to be honest and if there was a problem he would ring i would recommend backyard grannys in the future."

Wayne Guthrie

"We just had our Granny Flat completed (Jan 2025) and myself and my wife are very pleased with the results. Backyard Grannys were flexible enough to incorporate a design which was generated by my wife utilising an off the shelf design/architecture computer program. Backyard Grannys then used this as the basis to complete an up to regulatory specification Granny flat design.Having heard so many horror stories of people having difficulties and severe disagreements with their builders, we found Backyard Grannys superior ethics and customer focused ethos to be a most unexpected pleasant surprise. We sincerely hope that Backyard Grannys never changes that aspect of your business, as in our case it has served you well, and gained you loyal and satisfied clients.The staff at Backyard Grannys are exceptional. From the sales and design team, to Backyard Grannys CEO Sarah Gow (who personally inspected each stage of the build) . Our site manager Aaron Mullins in particular was awesome. He took our calls no matter how busy he was and made himself available to address any questions, requests or concerns we may have had resolving all such queries promptly and to our satisfaction. A very client focused outfit.We would highly recommend Backyard Grannys to anyone. They were very responsive to requests and questions, and when we were told something, it was done without fail. Pretty great building experience overall. Dealing with Newcastle City Council......., well that's another story😆Pete and Michelle Evans21st of February 2025"

Peter Evans