‘Financing self-build house’ is one of the top questions for people considering a self-build project. This is of course a key consideration for any project and before applying for funding, it is important to access expert mortgage advice so you have a clear understanding of your budget and borrowing options.

We recommend BuildStore Mortgage Services as your first stop when evaluating your mortgage options. BuildStore is the UK’s leading mortgage brokerage specialising in mortgages and finance, designed specifically for homebuilding projects. BuildStore’s specialist mortgage advisors will recommend and tailor borrowing solutions to your financial circumstances, design and build specifications and payment schedule, and will have all the information you need about financing a timber frame home.

BuildStore fully understands the complex and specialist experience required when financing self-build houses. It has built solid relationships with lenders and has created more than 40 exclusive mortgages, designed specifically to solve the common issues faced by individual homebuilders.

These unique funding solutions set them apart from other mortgage brokers, and this allows them to help many customers who otherwise may not have had the chance to build their dream home.

How do self-build mortgages work?

Self-build homes are built and paid for in stages. To align with this process, self-build mortgages release funds in stages rather than as a single payment. There are two types of self-build mortgage, and the type that you will require depends on these factors:

  • How funds are released during the build
  • Whether your stage payments are subject to an increase in the value of works completed
  • Whether your stage payments are guaranteed based on your costs

You may be eligible for a Valuation-Based Stage Payment Mortgage, in which funds are released after each stage of the building process is completed and a valuation shows an uplift in value. This mortgage may not suit build payment terms for customers who have selected timber frame constructions.

You may instead be eligible for the BuildStore Cost-Based Stage Payment Mortgage, in which guaranteed payments are based on your build costs and released either before or after each build stage, depending on your payment schedule.

How much can you borrow?

How much you can borrow depends on your financial circumstances. Like any mortgage, lenders will assess your income and outgoings to calculate what you can afford.

For a standard self-build mortgage, you can typically borrow up to 75% of your project costs. With BuildStore’s higher lending percentages, you could borrow up to 95%, or 100% if you already own your plot, with a maximum of up to 85% of the expected end value of your home.

The BuildStore Difference

  • Specialist knowledge and expertise
  • Competitive interest rates
  • Exclusive products and lenders
  • Interest-only payments during the build
  • Guaranteed cost-based stage payments to coincide with your costs
  • Ability to stay in your current home until your new one is complete
  • Tailored cash flow to suit your build and payment schedule
  • Borrow up to 95% of your land and build costs

For more information and expert advice on how to fund your self-build click here to enquire or call 0345 223 4888.

Note – your home may be repossessed if you do not keep up repayments on your mortgage.

Self-build homes are built and paid for in stages