What they are
Standard residential mortgages don’t cover building your own home. A self-build mortgage is designed for projects that develop in stages and usually has a higher interest rate because of increased risk, inspections, and administrative costs. Processing can take longer than average, often five to six months.
Key requirements
Lenders expect detailed plans, a realistic cost breakdown, building regulations approval, and at least outline planning permission. Most require a professional builder or qualified project manager rather than pure DIY.
Deposit and lending criteria
A valuer evaluates the projected final value and monitors progress during construction. Loan amounts depend on the type of build, construction methods and materials, location, your credit history, and affordability. Many lenders will not lend more than 75% of the land value and a similar percentage of build costs, so deposits are usually larger. Some require you to own the land prior to applying.
Stage-by-stage funding
Funds are released in tranches aligned with build milestones. Depending on the lender, advances may be made at the start or completion of each stage, such as land purchase, laying foundations, up to eaves, watertight (wind and watertight), plastering, and final completion ready for occupation.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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Where we are
HCF Partnership
Ground Floor, 8 Beaumont Gate,
Shenley Hill, Radlett,
Hertfordshire, WD7 7AR