Best Self Build Mortgages For 2024

Start Your Self-Build Mortgage Application Today With Lending Expert!

Many wish to build their own home, however, in order to fund this project you might need to take out a self-build mortgage. Using Lending Expert as your mortgage broker can help you secure the best self-build mortgage for your needs.

When you are first planning on building your own home you will need to find a way to pay for all of the jobs that need to be done. The most common way of doing this is by taking out a self-build mortgage.

Unlike a standard residential mortgage, this mortgage means that the lender will provide you with some of the money either before or after each key stage of building. This helps you to fund the building costs of your new home. This also helps the lender as there is less risk involved when they provide the money in parts, allowing them to see where it is being spent.

Things To Consider When Taking Out a Self-Build Mortgage

Taking out a self-build mortgage can be hard as you will need to provide clear detailed planning on how and when you will build each part of your new build. Planning permission for the home must be acquired before you apply for your self-build mortgage.

Before taking out a self-build mortgage, make sure to share the objectives with your mortgage advisor so that you can ensure that the mortgage suitably meets your requirements.

Lending Expert is a mortgage broker and can compare over 1,000 self-build mortgage deals across the UK. Whilst high street banks will typically offer self-build mortgages too, we can help find the best option for you with rates from 1.39% per month, whether you are looking for interest only, fixed, variable, tracker or have a bad credit history.

Start by clicking on ‘Check my Eligibility’ below and enter some basic details about you and your property – and Lending Expert will be able to help you find the best self-build mortgage according to your requirements.

Key Features

• Rates from 1.39% per month.
• Borrow up to £2 million.
• Minimum deposit of 25%.
• Loan Term – 1 to 25 years or upon request.
• Arrears and advance Self-Build mortgages available.
• Free tool to compare no deposit mortgages.

What Type of Mortgage Do I Need for a Self-Build?

When you get a self-build mortgage, there are two types of mortgage that you can apply for. The difference between them is when you will receive the funds from your lender. The types of mortgage are:

Arrears – When you have an arrears self-build mortgage you’ll receive payments after each completed stage of the build (outlined below). This is the most common type of self-build mortgage and is better for people who already have a lot of cash on hand.

Advance – This mortgage means that payments are released at the beginning of each stage of the build, this allows you to have the money when the bills for labour and materials are due. Although fewer lenders offer this deal, with a good credit score and history of repayments you could be eligible for an advance mortgage with Lending Expert.

Be aware that interest rates for self-build mortgages can often be higher than a standard mortgage.

What Are the Advantages of a Self-Build Mortgage?

There are many advantages to building your own home and getting a self-build mortgage. Some of these advantages are:

• No Stamp Duty – When you have a self-build mortgage you do not have to pay the potential thousands of pounds in stamp duty. You only have to pay stamp duty on the land itself if it exceeds £125,000.
• High Value Of The Property – Often you will find that once you have completed your property that its value is much higher than the money you have paid for the building and for the labour.
• Easier Residential Mortgage Application – After paying off a self-build mortgage on time then it will be much easier for you to get a residential mortgage because you have shown lenders that you are a reliable loanee.

What Deposit Do I Need for a Self-Build Mortgage?

Most lenders will ask for a 25% deposit of the total project value, and some lenders can even ask for up to 50%. Self-build mortgage deposits are usually much higher than normal residential mortgage deposits.

Lending Expert can help find the best self-build mortgage for you where the deposit fits your requirements.

What Do I Need To Provide To Get a Self-Build Mortgage?

Getting a self-build mortgage can be difficult just because of the vast amount of documents that you need to provide in order to apply.

First you will need to show your lender proof of what everything will cost during your build so that they can lend you the correct amount of money. You will need to provide proof of funds such as:

• Land purchase and associated fees.
• Construction design fees.
• Construction costs.

Then, once you have all of these prepared, as well as all the documents that you need to provide for a residential mortgage such as credit checks and income proof, you will also need to show these extra things:

• A copy of the planning permission.
• Copy of construction drawings and specifications.
• Copy of total project cost estimate (where possible, fixed-price contracts).
• Copy of Building Regulations approval.
• Copy of site insurance and structural warranty.
• Architect’s professional indemnity cover (if required).

Once you have provided all of these documents your lender will be able to determine how much they can allow you to borrow for your build. Be aware also that once your house is determined as being complete you will have to apply for a normal residential mortgage.

Make sure that you have all of these documents before you apply for a self-build mortgage.

When Are Funds Released for a Self-Build Mortgage?

When you get a self-build mortgage the funds that you will receive are going to be given to you at different stages of your building. Although this differs from lender to lender the outline will be that you will get your first payment when you have the land and planning permission.

Then you will receive the money either before or after the following are put in place:

• Substructure.
• Wallplates.
• Wind and watertight roof tiled.
• First fix.
• Second fix.
• Certified completion.

How Do I Compare Self-Build Mortgage Rates?

Working with a mortgage broker such as Lending Expert will help you find the best mortgage to suit your circumstances without impacting your credit rating.

Contact us today to speak to an expert and start comparing first time buyer mortgages to find the best option for you.

What Areas of the UK Does Lending Expert Cover as a Self-Build Mortgage Broker?

We proudly offer self-build mortgages across the entire UK, including Birmingham, Brighton, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, London, Manchester, Nottingham, Newcastle, Sheffield and more.

How Can I Improve My Chances of Getting a Self-Build Mortgage?

There are a few simple factors that can help improve your chances of getting a mortgage if you are building your own home:

• Spend Wisely – Lenders will check your expenditure and if you have a fluctuating income then lots of spending will deter lenders from allowing you to borrow.
• Improve Your Credit Score – Having a good credit score is always a good way to get into a lender’s good books. Paying off any outstanding bills is a good start.
• Save For A Deposit – A larger deposit makes getting a mortgage when you are building your own place a lot easier, so saving for a larger deposit can dramatically increase your chances of being accepted.
• Speak To The Experts – Here at Lending Expert we will provide the best quality service and understand each individual’s circumstances are different. Speak to us today and get started on your self-build mortgage journey.

Why Use Lending Expert as Your Self-Build Mortgage Broker?

Working with a number of high street banks and specialist mortgage lenders, Lending Expert has access to over 1,000 mortgage deals available and is in the perfect position to help you get approved and get the best rates.

Our eligibility checker is completely free to use and can provide an indicative quote, with no obligation.

Founded in 2013, we have years of experience working in the secured loan and mortgage market and have helped thousands of customers to date. Our values have always been to find the right product for the right individual at the competitive rate – and we are pleased to offer our services for you today!