<h2 id="what-is">What is a self build mortgage?<\/h2>\r\nA self-build mortgage is designed to meet the specific needs of someone who is looking for financing to build a house rather than buying a property that is already built and ready to move into.\r\n\r\nWhereas a traditional mortgage will release all of the funds required to complete a purchase in one go, mortgages for self build homes will release money at key stages during the construction of your property.\r\n<h3>Are there any self build mortgage requirements I should know about?<\/h3>\r\nSelf build mortgage\u00a0lenders will usually offer this type of lending on the understanding you have the means and expertise to either build a home yourself or be able to supervise its construction.\r\n\r\nIf you don\u2019t feel you have the expertise, don\u2019t panic. Lenders will also consider your application if you are intending to hire a contractor or building expert to manage the construction work on your behalf.\r\n<h3 id="funds-released">When are the funds released for a self build mortgage?<\/h3>\r\nThe release of stage payments for your self build mortgage will tend to vary from lender to lender.\r\n\r\nThere can, typically, be up to five identifiable stages during bricks and mortar property construction where self build mortgage funds will usually be released:\r\n<ol>\r\n \t<li>Purchase of a plot of land<\/li>\r\n \t<li>Foundations and footings in place<\/li>\r\n \t<li>Eaves height completion (walls built up to roof level)<\/li>\r\n \t<li>Watertight roof in place<\/li>\r\n \t<li>Internal completion and final fixes<\/li>\r\n<\/ol>\r\nReleasing funds in stages allows you to plan ahead with your construction costs in the knowledge you will know when to expect to receive money. These funds can then be paid to contractors or any other third parties who may be owed money as part of the build.\r\n<h3 id="how-they-work">How do self build mortgages work?<\/h3>\r\nTraditionally there are two types of\u00a0self build loans, based on when the funds are released at each stage in the build process:\r\n<ul>\r\n \t<li>Arrears \u2013 funds released upon completion of each build stage<\/li>\r\n \t<li>In advance \u2013 funds released upon commencement of each build stage<\/li>\r\n<\/ul>\r\nOf the two\u00a0types of self build mortgage, the arrears option is most commonly used with the money for each stage paid out once the work has been completed and a professional valuer has assessed the construction to that point. For this reason most lenders will want you to be able to fund the first 20% approximately yourself.\r\n\r\nThis type of\u00a0self build mortgage\u00a0is better suited to those who already have sufficient capital of their own to help fund the construction of the property without being over reliant on\u00a0self build loans.\r\n\r\nHowever, not everyone who has the desire to build their own home can fall back on large cash reserves. In this instance the \u2018advance\u2019\u00a0self build mortgage\u00a0would be a better option. As the money is released at the beginning of each stage rather than at the end, you would have the\u00a0self build finance\u00a0you need to pay for materials and labour costs.\r\n<h3 id="advantages">Advantages of a self build mortgage<\/h3>\r\nThe main advantages of\u00a0mortgages for self build properties\u00a0would be:\r\n<ul>\r\n \t<li>You get to design everything in your dream home, from scratch to your own specifications<\/li>\r\n \t<li>Generally works out cheaper overall to build your own home rather than to buy the equivalent as a completed property<\/li>\r\n \t<li>Savings on\u00a0<a href="\/buy-to-let-mortgages\/buy-to-let-tax-implications\/">stamp duty<\/a>\u00a0\u2013 you only pay if the price of the plot of land exceeds the stamp duty threshold (building costs are not included)<\/li>\r\n<\/ul>\r\n<h3 id="disadvantages">Disadvantages of a self build mortgage<\/h3>\r\nThe main disadvantages of using a\u00a0mortgage loan to build a house\u00a0would be:\r\n<ul>\r\n \t<li>Interest rates and\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/deposits\/">deposits<\/a>\u00a0for\u00a0self build loans\u00a0are usually higher than traditional mortgages due to the risk involved for lenders<\/li>\r\n \t<li>Usually there\u2019s much more paperwork involved with building your own home and it requires careful planning throughout otherwise costs may escalate<\/li>\r\n \t<li>Cost of alternative accommodation whilst your new home is being built<\/li>\r\n \t<li>The possibility of unforeseen costs and time delays is greater<\/li>\r\n<\/ul>\r\nIf you\u2019re thinking of\u00a0getting a mortgage to build a house\u00a0and want to know more about the types of\u00a0self build finance mortgages\u00a0available,\u00a0<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">make an enquiry<\/a>\u00a0and we will arrange for an expert to get in touch.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2>Can I get a mortgage for a self build project?<\/h2>\r\nIf you meet the lender\u2019s eligibility and affordability requirements \u2013 which usually include having the means and expertise to build a property from scratch \u2013 then absolutely!\r\n\r\nMortgages for self builds are usually offered by specialist lenders and the <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-build\/self-build-mortgage-brokers\/">self build mortgage advisors<\/a> we work with know exactly which providers to approach for these products.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2 id="how-much">How much money can I borrow for a self build mortgage?<\/h2>\r\nThe amount you can borrow in the\u00a0UK\u00a0for a\u00a0self-build mortgage\u00a0will vary from lender to lender and will be based on their own internal\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-affordability\/">affordability criteria<\/a>. In this respect, a\u00a0mortgage for self build\u00a0purposes follows a very similar path to that of a traditional\u00a0UK\u00a0mortgage.\r\n\r\nA\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-affordability\/mortgage-income-multiples\/">multiple of your income<\/a>\u00a0will be used to form the basis of what a lender may initially be prepared to lend you for a\u00a0self build mortgage. Most lenders will use a multiple of 4x your income, some will use 5x your income and a few will go as high as 6x your income in certain circumstances.\r\n\r\nOnce a full affordability assessment has been completed, which includes an analysis of all your current income and expenditure, a lender will then make a final decision as to what you will be allowed to borrow.\r\n\r\nFor\u00a0self build mortgages, most lenders can offer maximum borrowing up to \u00a3500,000, some will go up to \u00a3600,000 and a few will go as high as \u00a31 million depending on the strength of the application and the location of the project.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2 id="deposit-required">What deposit is usually required for self build mortgage?<\/h2>\r\nDue to the unique nature of\u00a0self build finance\u00a0it\u2019s not unusual for a lender to request a\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/deposits\/high-deposit-mortgages\/">large deposit<\/a>\u00a0in order to provide them with sufficient security and confidence to allow borrowing for a building project rather than a property already completed.\r\n<h3>What is the minimum deposit needed for a self build mortgage?<\/h3>\r\nMost lenders will offer a loan to value (LTV) of 60%, some will go up to 70% and a few will go as high as 80%. In certain circumstances there are particular lenders who may offer a\u00a0self build mortgage\u00a0with a LTV as high as\u00a095%.\r\n<h3 id="no-deposit">100% self-build mortgages: Can I get a self build mortgage with no deposit?<\/h3>\r\n<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/deposits\/no-deposit-mortgages\/">100% mortgages\u00a0<\/a>are\u00a0quite rare, even for traditional mortgages. However, the advisors we work with adopt a \u2018whole of market\u2019 approach and would be able to help you source\u00a0self build mortgage\u00a0providers that offer the best deposit terms, including\u00a0100%\u00a0self build mortgages. You will more than likely need other security that the lender can use as the deposit.\r\n\r\nIf you\u2019re looking at\u00a0financing a self build\u00a0and want to know more about how much you can borrow\u00a0<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">get in touch<\/a>\u00a0we can arrange for a specialist to contact you and discuss further.\r\n<h3>Can I get a self build mortgage using land as the deposit?<\/h3>\r\nIf you are applying for a self build mortgage and already own the land you\u2019re planning to develop on, some lenders will allow you to put a percentage of the plot\u2019s value towards the deposit. Exactly what percentage you can use will vary from lender to lender, so specialist advice will be needed to find the best deal for you.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2 id="other-options">What other self build finance options are available?<\/h2>\r\nIf you run a\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/">commercial<\/a>\u00a0building business there are a number of other viable alternatives available which you could use to help\u00a0build a house\u00a0other than a\u00a0mortgage.\r\n<h3>How to get financing to build a house, besides using a self build mortgage<\/h3>\r\nYou could potentially secure funding for a development project by applying for one of the following products\u2026\r\n<ul>\r\n \t<li>Self build\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bridging-finance\/">Bridging finance<\/a><\/li>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/development-finance\/">Development finance<\/a><\/li>\r\n \t<li>Joint venture property development finance<\/li>\r\n \t<li>Mezzanine finance<\/li>\r\n \t<li>Unsecured business loan<\/li>\r\n<\/ul>\r\nIf you\u2019re building a house in a private capacity for yourself, there are a few alternatives you could consider:\r\n<ul>\r\n \t<li><a href="https:\/\/www.onlinemortgageadvisor.co.uk\/remortgages\/">Remortgage\u00a0<\/a>to build a house<\/li>\r\n \t<li>Taking out a\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/second-charge-mortgages\/">second mortgage<\/a>\u00a0to buy a house\u00a0(2nd charge borrowing)<\/li>\r\n \t<li>Unsecured personal loan (if amounts required are below \u00a325,000)<\/li>\r\n<\/ul>\r\nBoth the above options have their merits depending on your circumstances.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2 id="self-build-faq">Frequently Asked Questions<\/h2>\r\nIn this section, you will find the answers to some of the questions we hear most frequently about self-build mortgages.\r\n<h3>How easy is it to get a self build mortgage?<\/h3>\r\nIt can be more difficult to get a self build than a standard residential mortgage as fewer lenders offer these products and the ones which do usually have additional eligibility requirements, such as the borrower having development experience.\r\n\r\nWhether you have development experience or not, the best way to apply for a self build mortgage is through a whole-of-market broker, like the ones we work with.\r\n<h3 id="barn-conversion">Can I use a self build mortgage for a barn conversion?<\/h3>\r\nYes, it\u2019s certainly possible. Barn conversions typically require significant re-construction work to be carried out \u2013 plus planning permission in place \u2013 and whilst they would not be classed as a new property built from scratch, a\u00a0self build mortgage\u00a0would be a consideration as would a conversion and renovation mortgage.\r\n\r\nIf you\u2019d like to know more about the different finance options available for barn conversions take a look at our specific article on this subject here.\r\n<h3 id="without-planning-permission">Can I get a self build mortgage without planning permission?<\/h3>\r\nIt\u2019s highly unlikely any lender will lend you money for such a project without the requisite\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/property-types\/planning-permission\/">planning permission<\/a>\u00a0because without this you can\u2019t proceed to build.\r\n\r\nIn the UK, planning permission usually comes in two stages \u2013\r\n<ul>\r\n \t<li>Outline consent \u2013 agreement with local authority to build on the plot of land but no agreement for the specifics of the property<\/li>\r\n \t<li>Detailed consent \u2013 agreement on the specifics of the property<\/li>\r\n<\/ul>\r\nSome lenders may lend you some of the money once outline consent has been received. However, further stage payments could be withheld until full detailed consent is in place.\r\n<h3 id="payments-start">With a self build mortgage, when do payments start?<\/h3>\r\nAs outlined above, you can usually start\u00a0drawing down\u00a0payments from\u00a0a self build mortgage\u00a0once a sale has been agreed for the plot of land where you are planning to build your new home.\r\n\r\nFurther stage payments will commence once identifiable progress has been made on the new property and would be pre-agreed in advance with your lender.\r\n<h3 id="self-build-btl">Can you use a mortgage for a self build for buy to let mortgages?<\/h3>\r\nYes, it\u2019s possible. There are no caveats placed upon\u00a0self build mortgages\u00a0in relation to whether the intention, once the property has been built, is to live in it permanently or to make it available to\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/">rent out<\/a>.\r\n\r\nIt\u2019s important to discuss your intentions with any prospective lender so they can give you the most appropriate advice and find a lending method most suitable for your requirements.\r\n<h3 id="self-build-bad-credit">Can I get a mortgage to build a house with a bad credit record?<\/h3>\r\nA\u00a0poor credit\u00a0history can, no doubt, cause problems with how much a lender may be prepared to lend you for a\u00a0self build mortgage, depending on the type of\u00a0bad credit\u00a0you\u2019ve had and when it was registered.\r\n\r\nSome lenders might offer unfavourable rates or turn the borrower away if there\u2019s bad credit on file, but there are specialist\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/commercial-mortgages\/bad-credit-commercial-mortgage\/">commercial lenders<\/a>\u00a0who cater for individuals and businesses with various forms of bad credit.\r\n\r\nFind out more about <a href="https:\/\/www.onlinemortgageadvisor.co.uk\/bad-credit-mortgages\/how-to-get-a-mortgage-with-bad-credit\/">getting a mortgage with bad credit<\/a>.\u00a0Alternatively,\u00a0<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">make an enquiry<\/a>\u00a0and we can arrange for an expert to contact you directly and discuss further.\r\n<h3 id="htb-self-build">Can I use the Help To Buy scheme in conjunction with a \u00a0self build mortgage?<\/h3>\r\nThis is a slightly tricky one. As long as you meet all the other\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/help-to-buy-mortgages\/">help to buy<\/a>\u00a0criteria you can use the government bonus towards the purchase of land for a self-build home. Your intention would have to be to live in the property and it must be priced no more than \u00a3250,000 (outside London) or \u00a3450,000 (in\u00a0London).\r\n\r\nHowever, you would need to find a lender who would also agree to release the mortgage funds in stages, in line with the benefits of a self-build mortgage.\r\n\r\nIf you\u00a0<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">make an enquiry<\/a>\u00a0we can arrange for an expert to contact you and discuss further.\r\n<h3 id="self-build-second-home">Can I get a self build mortgage for a \u00a0second home?<\/h3>\r\nYes this is certainly possible. The lender you choose will have their own\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-affordability\/">affordability<\/a>\u00a0criteria for what they will allow you to borrow for a\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/2nd-home-mortgages\/">second home<\/a>. If you match this criteria (which is usually stricter than for a first home) there\u2019s no reason why you cannot proceed.\r\n<h3 id="self-build-ltd-company">Can I get a self build mortgage using a limited company?<\/h3>\r\nYes, there are no restrictions on applying for a\u00a0self build mortgage\u00a0in the\u00a0UK\u00a0either in your personal name or in the name of a business.\r\n\r\nIf you\u00a0<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">make an enquiry<\/a>\u00a0we can arrange for an expert to get in touch and offer advice as to the benefits and potential pitfalls of using a\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/buy-to-let-mortgages\/spv-mortgages\/">limited company<\/a>\u00a0rather than your personal name to apply for a mortgage.\r\n<h3 id="interest-relief-self-build">Can you get mortgage interest relief for a self build mortgage?<\/h3>\r\nMortgage interest relief is available to buy-to-let landlords and is a tax allowance designed to reduce the overall tax burden on their rental income, therefore, wouldn\u2019t really be connected to the main purpose of a\u00a0self build mortgage.\r\n\r\nAt the time of writing, this is being phased out by HM Treasury and within a couple of years mortgage interest relief will no longer be available.\r\n<h3 id="no-income-self-build">Is it possible to get a self build mortgage with no income?<\/h3>\r\nAll\u00a0self build mortgage\u00a0lenders, as with traditional mortgages, will conduct a full\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-affordability\/mortgage-affordability-checks\/">affordability assessment<\/a>\u00a0before agreeing to proceed with any application. In this respect it is likely that your application will be declined if you are unable to provide any income details.\r\n<h3>Are interest only self-build mortgages available?<\/h3>\r\nYes, these products are available as\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/interest-only-mortgages\/residential-interest-only\/">interest only<\/a>, capital and repayment, and\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/interest-only-mortgages\/part-and-part-mortgages\/">part and part mortgages<\/a>, subject to availability.\r\n<h3>Can I get a commercial self-build mortgage?<\/h3>\r\nSelf-build mortgages are geared towards the residential sector. If you are hoping to build your own commercial property, the product you would need to apply for is development finance \u2013 you can read more about that in our guide\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/development-finance\/">here<\/a>.\r\n<h3>Are there self employed self-build mortgages?<\/h3>\r\nYes,\u00a0self build mortgages\u00a0for\u00a0self-employed\u00a0and\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/income-types\/contractor-mortgages\/">contractors<\/a>\u00a0are available. Your choice of lenders will be slimmer and the way the deal is assessed will be different \u2013 you can read more about how lenders treat self-employed applicants in\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/self-employed-mortgages\/">our guide<\/a>.\r\n<h3>Can I get a self build mortgage to construct a timber frame property?<\/h3>\r\nYes,\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/property-types\/timber-framed-property\/">timber frame<\/a>\u00a0is a popular material among self build lenders as it can mean faster construction and a development cycle that\u2019s less weather dependent.\r\n\r\nThat said, some mortgage providers won\u2019t lend on timber frame properties, so it\u2019s essential to seek specialist advice to ensure you end up with favourable rates.\r\n<h3>Can I get a self build mortgage to construct a log cabin?<\/h3>\r\nLog cabins fall into the \u2018timber frame\u2019 niche as well as the\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/property-types\/non-standard-construction\/">non-standard construction<\/a>\u00a0category, which means you choice of approachable lenders will be fewer if you plan is to construct one from scratch via a self-build mortgage.\r\n\r\nWith this in mind, it\u2019s important to consult with a whole-of-market broker for the right advice and to ensure you end up with the most favourable rates.\r\n\r\n<hr class="divider" \/>\r\n\r\n<h2 id="expert-self-build">I can\u2019t get a self build mortgage. What can I do? Speak to an expert!<\/h2>\r\nIf you\u2019ve been\u00a0<a href="https:\/\/www.onlinemortgageadvisor.co.uk\/mortgage-application\/refused-for-a-mortgage\/">declined<\/a>\u00a0for one of these products, help is available!\r\n\r\nSelf build mortgages\u00a0are set to become increasingly popular throughout\u00a02019. They can be quite complex and its important you understand all the potential pitfalls before taking the leap. Lots of people in your situation seek professional advice to assist them before making a final decision.\r\n\r\nIf you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an<a href="https:\/\/enquiries.onlinemortgageadvisor.co.uk\/match-me-with-a-specialist-broker">\u00a0enquiry here.<\/a>\r\n\r\nThen sit back and let us do all the hard work in finding the mortgage advisor with the right expertise for your circumstances. \u00a0\u2013 We don\u2019t charge a fee and there\u2019s absolutely no obligation or marks on your credit rating.