Mortgage360 Logo

Call Us

0330 122 5022

Email Us

hello@mortgage360.co.uk

Self Build Mortgage Broker

Ready to talk?

CTA Booking Form

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Mortgage360 are here to help you make the right choice.

Here at Mortgage360 we pride ourselves on offering tailored advice, coupled with great service. We are mortgage experts, so you can rest assured that you are in safe hands when searching for your new mortgage, whatever your situation may be.

Key Benefits

We are committed to guiding you through one of life's most significant financial decisions.

When it comes to securing the right mortgage, our expert team is here to ensure that you make informed choices tailored to your unique needs.

Self build mortgages can be more difficult to secure – we’ll help you access the right lenders.
We’ll search out the right product for you, from mainstream providers through to specialist lenders.
We can put together a package including insurance services to match your individual requirements.

Have you always dreamed of building your own home? Creating a property that matches your individual requirements and your plans and vision for the future?

There are some very practical advantages too. You can save a lot of money, and you can also create a home which is eco-friendly and costs less to run.

Maybe your plans are already in hand, and you’re thinking about how you will finance the project. Self build mortgages are a real thing, but they can be more difficult to find and secure.

Advantages of working with a specialist Self-Build mortgage broker

It will be more complex to secure the right mortgage deal on a self build property, so it’s definitely worth consulting a specialist mortgage broker.

A specialist mortgage advisor will have access to comprehensive panel of mortgage products and schemes. They’ll be able to work for you, securing the right deal to match your personal circumstances.

Mortgage brokers are qualified professionals, regulated by a defined code of conduct. You can be sure your advisor will have your best interests at heart.

In addition, if you’re self-employed or have a bad credit history, your broker will be able to access specialist lenders on your behalf, aside from the traditional high street or mainstream providers

Specialist mortgage brokers can help you with a broader range of financial services such as life insurance and income protection, putting together a portfolio to match your needs. Talk to us at Mortgage360 – we’ll put together a package designed around your needs and provide you with specialised self-build mortgage advice to suit your budget.

Types of mortgages available for Self-Build projects

A self-build mortgage is different from a conventional mortgage. Rather than paying a lump sum to cover the entire cost of a property, they release funds in stages, essentially creating the cash flow you need to finance the building of your property in terms of materials and labour.

Broadly speaking, there are two types of self-build mortgages

– Advance

An advance self-build mortgage is designed for people who don’t have cash in hand to finance the project. This type of mortgage releases funds at the start of each building phase.

Some mortgage lenders will only lend on the build, rather than the land. Interest rates on advance mortgages are typically higher than other types of mortgages.

– Arrears

If, on the other hand, you do have your own funding for some of your self-build costs, then the arrears mortgage will probably be a better route for you. Arrears mortgages release funds after the completion of each stage, so you fund the stage and then receive the money afterwards.

– Other Options

If you own a home already and have sufficient equity in it, then your other options are to remortgage or take out a bridging loan to fund your self-build. Once the project is complete, you can sell the original property and pay this off. Interest rates on bridging loans make this a more expensive option, and bridging finance will usually have a maximum twelve-month term, so you have to be confident you can complete your build within this space of time.

Advantages of Self-Build Mortgages

Self-build gives you a unique opportunity to create your own home, designed around your needs, exactly how and where you want it to be.

It will almost certainly cost you less than buying a comparable property, and will probably be significantly more valuable than the total of the money you have spent on land, labour, building materials and professional fees.

You will only pay stamp duty on the cost of the plot of land, not on the remainder of your self-build costs, and even then only if the plot of land costs more than £250,000 (until 31 March 2025).

Disadvantages of Self-Build Mortgages

It will be more expensive than a conventional residential mortgage, although you will probably be borrowing less in total than you would if buying a comparable existing property. Self-build mortgages typically attract higher interest rates to mitigate what is perceived as a higher level of risk, as well as higher arrangement fees.

You will also have to find a larger deposit for a self-build mortgage, probably around 25% of the total projected cost, but for some lenders, this may be higher.

Money will only be released in stages (or tranches) to protect the lender in the event of issues arising.

You will need to provide your lender with full documentation on the proposed self-build, including floorplans, detailed costings, site insurance, a suitable warranty and project completion timelines.

The funding stages

Exactly how and when funds are released will vary from lender to lender. Funding is released in stages to minimise risk for the lender. If you fail to complete the project for any reason, there will be tangible assets to cover the funds already advanced.

Build stages usually need to be signed off by a surveyor. Typical staging (for brick/block and timber frame systems) is as follows;

  • Funds released for land purchase
  • At substructure stage (foundations)
  • Built to eaves height
  • Roofed (wind and watertight)
  • First fix (structural work)
  • Second fix (finishing work)
  • Completion

A contingency fund

Don’t expect everything to run smoothly! Unexpected issues and delays will almost certainly crop up, so it’s advisable to allow for 15% of your total build costs as a contingency fund to avoid having to secure extra funding, with additional costs.

Applying for a Self-Build Mortgage

In addition to all the standard mortgage application requirements, your self-build mortgage will require a number of additional aspects, including;

  • Your ability to demonstrate to lenders that your project is feasible, carefully planned and professionally managed
  • Detailed projections covering costs and timelines
  • Planning permission
  • Documentation including floorplans etc

A self-build mortgage can be a great tool for helping you achieve your dream home at an affordable cost.

Remember you will need to live somewhere while the build is being completed, and the costs involved here will be taken into account when your mortgage lender is assessing your overall affordability.

What deposit is required for a self-build mortgage?

The deposit will typically be larger than for a standard residential mortgage. There may be separate considerations for buying the land and actually building the property.

As an example, a 75% LTV (Loan to Value) might be set on the land purchase, and an 85% LTV on the build costs.

A typical deposit would be around 25% of the total projected cost. This figure may also be impacted by your assessed affordability and credit history.

Assessing Your Financial Circumstances and Credit History

Everyone seeking a mortgage needs to satisfy the lender’s affordability checks. Lenders will look closely at your income, outgoings and any existing debts, as well as your credit history.

Specialist lenders may be more flexible in terms of allowing bonuses and commissions to be taken into account.

Assessing the Building Project and Labour Costs

It’s possible for building costs to quickly spiral out of control, so you’ll need to set a budget by working out the proposed costs.

Research your costs carefully – they should include everything from planning permission to architects and other professional fees. Remember your final fixtures and fittings.

Assess your finances carefully and decide whether this financial commitment is for you. Remember you’ll need to live somewhere while you build!

Don’t just go for the cheapest quotes, look for testimonials. Always pay in instalments.

Calculating Affordability and Gaining Approval for Funds

Alongside the mandatory affordability checks, gaining approval for a self-build mortgage will also be dependent upon your design and construction methods being compliant with Building Regulations. Some lenders may be unwilling to lend on some construction systems.

Some lenders will require the build costs to be calculated by a qualified quantity surveyor, whilst others will work on a fixed build cost budget.

Other requirements will include;

  • Detailed planning permission
  • Architects drawings
  • Insurance and structural warranties
  • Energy performance calculations (SAP)
  • A valuation of the proposed self-build

Why Choose Mortgage360 as your Self-Build Mortgage Broker?

At Mortgage360, we understand the trials and tribulations of building your own home. We know which lenders offer competitive deals. We’ll get to know you and your personal circumstances in order to advise you on the best route forward to secure a mortgage deal for your dream self build home! Contact us to start the ball rolling.

Self Build Mortgage Broker

Here at Mortgage360, we can provide expert advice on all your mortgage and insurance needs.

Whether you’re ready to get started on your journey now, or you’d just like a no obligation consultation, we’d love to hear from you…

Contact Form - Home Page

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Reviews

See what our clients are saying....

google
Pippa Lister
April 11, 2024

Gavin at Mortgage 360 was superb throughout. He responded quickly to any questions or queries we had, worked round our busy work life with evening zoom meetings and kept us regularly updated. He made the whole process straightforward and clear. Thank you Gavin

google
M Wick
April 10, 2024

Matt at Mortgage360 is an amazing broker. He was always on hand to lend support and offer calm and well explained help. As a first time buyer, his help was always appreciated and the service which they offer is top notch. I could not recommend mortgage360 highly enough

google
Stormin' F
March 13, 2024

I cannot recommend Gavin more highly for his invaluable and trustworthy expert support in navigating through the mortgage process. I have used Gavin’s services several times over the years and he had always gone above and beyond the call - thanks Gavin.

google
Ash Gibbs
March 9, 2024

Gavin has helped us to no end. Brilliant service and he was willing to go the extra mile to ensure we got the very best deal.

google
Ross McWilliams
February 22, 2024

Our experience using Mortgage360 has been absolutely brilliant. Matt has been there for us and supported with our mortgage application every step of the way, with an excellent outcome. Thank you for everything - you’re a star!

google
Jonathan Bush
February 16, 2024

Gavin arranged my Mortgage for my first home and i couldn't have been happier with the service received, explained things in great detail and communicated efficiently. I would recommend Mortgage360 to anyone in need of mortgage advice and I will be definitely using them in the future.

google
Nigel Porritt
February 15, 2024

I contacted Mortgage360 I was looking for help with the purchase of my first home. They were great at explaining all of my options, taking time to ensure I understood everything fully and constantly provided updates throughout the whole process. I couldn’t have asked for a better service and would highly recommend them. Thanks Gavin and Matt!

google
Richard Espin-Bradley
February 9, 2024

Matt Illingworth was superb! Readily available on the phone, or always called back within a short space of time. Made plenty of time to discuss our needs and never tried to hurry us into making decisions. His advice was clear and helpful.

google
James Hall
February 9, 2024

Gavin at mortgage360 has been outstanding, gives incredibly in depth information about all things mortgage related. Has helped us secure a mortgage at a better rate than we could have got ourselves, saving us lots of money. He made the whole process as stress free as possible and provided all templates for files we needed to send and always got back to our queries within a couple of hours at maximum. If I could give more than 5 stars I would. Keep it up Gavin!

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
MOST BUY-TO-LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

There may be a fee for arranging a mortgage. The precise amount will depend upon your circumstances, however we estimate this to be between £200 and £600.