Modular Homes and Kit Homes: what’s the difference?


When it comes to researching prefabricated home options, many people tend to mix up Modular Homes and Kit Homes. Are they just different terms for the same thing?

As it turns out, Modular Homes and Kit Homes can refer to two very different things, even though they are both prefabricated structures. It’s important to make the distinction so you know what you are getting into with your new home. With that said, here are the five major similarities and differences between Modular and Kit Homes.

First we need to know what a kit home is? 

Kit homes refer to a home where most of the main components have been prefabricated off site and delivered to your home. Most kit homes only come with the materials required to complete the external 'shell' of the home. This means you are likely to see wall frames, roof trusses, floor structures, cladding and insulation only.  

Construction costs and add-ons

While kit homes tend to be listed at significantly cheaper prices compared to modular homes, it’s important to note that because of the major differences between the two, it’s pointless to compare them solely based on price.

This is especially true because when considering your budget for a kit home, you should factor in the extra costs like earthworks, services, fittings, installation and construction. If you are qualified, and intending to do the work yourself, you will also want to take your hourly labour rate into account.

Materials used

Both kit homes and modular homes are very much the same in terms of the materials. Both styles of construction utilise a similar array of materials, and stay up-to-date with sustainability demands.

The main difference between materials used are those not supplied within a kit home; this can include the internal walls, kitchen, bathroom and laundry fit outs along with appliances and fittings and fixtures. 

Build time

Modular homes are built off-site in a highly supervised facility, reducing build time significantly. This means all materials can be delivered to the one site, where many trades can work simultaneously to ensure the home is constructed in a much faster time period. 

Kit homes on the other hand can be compared to flat pack type approach from IKEA, but obviously on a much bigger scale than a shelving system. All the components come cut to size ready to be assembled. This extra installation and fitting will mean it could be months before you have a fully constructed home.

Design flexibility and custom designs

A modular home can have its design altered and changed during the planning stages, in order to fit with your requirements and vision. The flexibility of your modular design is limited only by your imagination and budget refinements. 

Kit homes are much less flexible in terms of design and specifications as you are basically buying them “off the shelf”. 

Finance approvals

A kit home is built by you, the owner builder, and so you will require an owner builder mortgage. This type of home loan may take longer to process, as it requires a lot of paperwork, final checks and documentation prior to approval.

Modular homes are built off-site by a professional building company which can be a lot more appealing to a lender. However, you should check with your lawyers and bankers for issues specific to securing a home loan on a modular home.


Now you know the similarities and differences between modular homes and kit homes, you can make wise decisions about your new home.

If you want to learn more about the different styles of construction available, make sure you check out our     E-book Frame Construction vs Brick and Tile!

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