self-build mortgages

Thinking about doing it yourself?

If you are planning on building your own property, a standard residential mortgage won’t be right for you. You need a specialist elf-built mortgage.

Speak to one of our self-build experts who can guide you through the process and help you to find the right lender for your build. Our Mortgage & Protection Advisers have years of expertise in this field so call 03454 500200 to book your appointment.

What is a self-built mortgage?

A self-build mortgage is a loan you take out to fund a property you are building yourself.

With a self-build mortgage, the funds will be released to you as the stages of the development progress, as opposed to receiving a ‘one-off’ lump sum that you would receive if you were buying a traditional pre-built residential home.

When funds are released depends on the lender. You’ll typically receive the first payment when you buy the land, more when the foundations are laid and a further payment when the property is built up to eaves level.

From your lender’s perspective, this will reduce their risk and give them the confidence that the money is being used at the scheduled times within the construction plan. From the homeowner or builder’s perspective, this means the project will continue to be funded until the property is completed.

What types of self-build mortgages are available?

There are two types of self-build mortgages.

  1. Arrears Mortgages

 The arrears mortgage is the most popular type of self-build mortgages. Funds are released after each build stage is completed. This type is best for people with accessible cash as you will be required to cover the cost of the build and then apply to the lender for reimbursement once the work is finished.

  1. Advance Mortgages

This type of mortgage is offered by a limited number of lenders.

Advance mortgage funds are released at the beginning of each stage giving you money to pay for labour and material costs. This type of mortgage is best for people with limited cash to fund the self-build, making it a more streamlined experience. It also diminishes the need for bridging loans and other short-term borrowings.

What do I need to apply for a self-build mortgage?

You will need to provide the ban k or building society with planning permissions, construction drawings, Building Regulations approval, proof of site insurance, structural warranty, and a breakdown of your build costs, including your plot cost. We can help you calculate these costs.

When are funds released with a self-build mortgage?

This type of mortgage is different to your standard, residential mortgage. With standard mortgage the funds are released on completion of the building process.

With self-build mortgages, you will receive stage payments as you build your house.

If you are building your own property from scratch, funds will typically be released at the following points in the build:

  • When you purchase the land (with the minimum of outline planning permission)
  • Laying of foundation (substructure)
  • Contraction of the property to eaves height (just before the roof trusses go on)
  • Once the roof is complete and the property is wind and watertight
  • First fix
  • Second fix
  • Certified completion

When you receive the funds depends on the type of self-build mortgage you have.

If you have an arrears self-build mortgage you will receive mortgage payments when the work is complete at each construction stage. With an advance self-build mortgage, funds will be received ahead of each stage, meaning you can pay contractors and suppliers quickly and efficiently.


Because we play by the book we want to tell you that…

You may have to pay an early repayment charge to your existing lender if you remortgage. Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.

Frequently asked questions

How much deposit is needed for a self-build mortgage?

How much can I borrow for a self-build mortgage?

What are the pros and cons of a self-build mortgage?

Are self-build mortgages hard to get?

Is it cheaper to self-build a house?

Can I change to a normal mortgage once the build is complete?

What fees are associated with a self-build mortgage?

Can I get a mortgage for just land?

Can I get a self-build mortgage on land that’s already owned?

Is a bridging loan a better option than a self-build mortgage?

Do I need insurance and warranties to get a self-build mortgage?

Speak to our experts

With access to 1000s mortgages from over 90 high street lenders, we can help you find the right mortgage. Our five-star Google reviews back this up. Call us now and speak to a member of our experienced team.

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