Self Build Mortgages

Many people are choosing to build their dream home and are applying for a self build mortgage that will allow their build programme to progress with money being released in stages.

The money for the build is released in a series of stages. These can be fixed or flexible depending on the lender but usually there are five. One of the key features of this type of mortgage is the fact that you can borrow up to 95% of the building costs.

The payments are available either at the end of each stage or at the start, that is, arrears stage payments or advance stage payments In the arrears stage payment method, the money for that stage is released after the stage has been completed and a valuer has visited the site. This can cause some self builders to have cash flow difficulties.

This advance payment mortgage has become very popular as it gives positive cash flow during the build. An advanced flexible self-build mortgage allows the release of monies at stages which include land, foundations, wall plate or erection of the timber frame, watertight/roof on, plastered and completion.


Sometimes a higher percentage advance fee is imposed, usually when a client is borrowing up to the 95% maximum at land stage.

The main benefit of this type of mortgage are that you do not need a bridging loan whilst remaining in your existing home during the constuction phase.

A fees free mortgage broker will be able to offer you the latest deals from lenders willing to offer finance for a self build property.

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