Self Build Mortgages

How self-build mortgages work

With a self-build mortgage, money is released in stages as the build progresses. Some lenders may lend towards the purchase of land, often up to a percentage of the purchase price or value, whichever is lower. Funding for the build is then released at agreed stages.

The stages may be fixed or flexible depending on the lender, but commonly follow the major milestones of the project.

Arrears and advance stage payments

Arrears stage payments

Money is released after a valuer has visited the site and confirmed that a stage has been completed. This means you may need enough cash available to pay for work before the lender releases the next payment.

Advance stage payments

Money is released at the beginning of an agreed stage, before work starts. This can support cash flow during the build and may make it easier to remain in your current home while work progresses.

Eligibility, stage definitions, loan-to-value limits and valuation requirements vary by lender. Advice can help you understand which approach fits your project and cash-flow needs.