Home Buying Guide
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Self Build Homes and Mortgages

Self-Build Mortgages – How Do They Work?

Historically, self-build mortgages were quite restrictive, requiring you to have a pretty large cash reserve to get you going.

The good news is that a whole new breed of lenders have emerged over the last few years who take a more flexible approach, and you are now able to borrow anything up to 95% of the value of the land and property.

It's worth noting that you can normally only get a self-build mortgage if these two conditions are met:

• Planned house is detached and will stand completely on its own plot of land

• You are planning to be owner-occupier – self-build mortgages do not cater for commercial property developers or buy-to-let projects

In terms of interest rate and repayment options, self-build mortgages are very similar to mortgages for existing houses.

The main difference is that the money is not all made available at once – instead, payments are staged.

What Are The Self Build Mortgage Stages?

There will be five or six (depending on whether the land purchase is included) fixed stages in the self-build process.

At each of these stages, your mortgage lender will release a portion of the funds, based on the assessment of their valuer who will regularly inspect the build.

The standard stages are:

1. Plot of land purchased

2. Foundations/initial groundwork complete

3. Walls or timber frame complete up to eaves

4. House Wind & Watertight

5. Services installed

6. Completion

The reason for these stages is to prevent the self-build mortgage lender lending you more than the property is worth at any point in time – in case you do not finish the build.

Self Build Homes and Mortgages Guide

To read more on this subject please see the list below or your mortgage guide or your home buying guide

Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below

Value of Property £ (eg 125000) Borrow How Much? £ (eg 92500) Your Mortgage Type    - please select - Re-Mortgage Purchase Buy to Let Overseas   First time buyer? Yes No Have you found property? Yes No Country   - please select - Andorra Australia Bahamas Barbados Belgium Belize Bulgaria BVI Cayman Islands Cyprus Canada Dutch Antilles France Greece Ireland Italy Jamaica Malta Mexico New Zealand Poland Portugal Spain St. Lucia Switzerland Trinidad & Tobago Turks & Caicos USA Other.. Sorry ! The amount you want to borrow is less than £25,000. This is the minimum allowed for a mortgage. But don't worry ! You could get the money via a personal loan. I want a free no obligation loan quote Click OK No thanks. I will change my borrow amount to more than £25,000 Click Cancel

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How to Find Your New Home / Property

What can you afford?

What do you want?... Where?

Price Differences

Don't overpay for being almost trendy

"Value Added" homes

How to look for your home
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Using the Internet
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Buying at an auction
Self Build Homes

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An outline of the process

Know your enemies

How to Find Your New Home / Property

Making the offer

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Costs of Buying a Home

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