Self-Build Mortgage Rates

Getting the best rate on a self-build mortgage requires considerable research. But it’s well worth the effort, as choosing the right loan can lead to big savings.

In this article, we’ll look at typical rates for self-build mortgages, some of the lenders that offer this type of loan and why seeking expert help from a self-build mortgage advisor can help you avoid a costly and regrettable mistake.

What interest rate can you get on a self-build mortgage?

Rates for self-build mortgages are typically higher than those for standard residential mortgages. This is because fewer lenders offer self-build mortgages, so there is less competition, and self-build home loans are considered riskier.

Our rates table below will indicate the types of rates you can get for a self-build mortgage at the moment.

Today’s best rates

Take a look at our rates table for an idea of the current self-build mortgage deals available.

Please note that the above rates are purely for example purposes, were accurate at the time of writing, but are subject to change. Speaking to a mortgage broker is the best way to find the most up-to-date deals.

How to compare self-build mortgage rates

With so many variables, finding the best self-build mortgage deal can seem daunting. So, we’ve put together this short guide to choosing the right deal for you.

Do your maths

It’s important to consider all costs associated with the building project, from materials and contractors to fees, insurance and, if necessary, your accommodation costs while your new home is being built.

Once satisfied, you’ve factored in every eventuality, adding 10% for contingency expenses. When you have a realistic idea of how much you’ll need to borrow, you’re almost ready to compare rates.

Get details of builders and contractors.

This is crucial to securing the best rate possible, as lenders need to have confidence in your project. One way to give them faith in your plans is to show them that the contractors who will carry out the work have experience successfully completing similar projects.

Don’t be afraid to ask prospective builders for evidence of previous projects. This can help secure the finances. After all, it’s in their interests, too.

You’ll still need to supply this information if you’re doing most of the work yourself. Remember this is a business transaction, so prepare a professional document to present to lenders.

Speak to a specialist self-build mortgage broker.

Niche lending areas almost always require expert advice. A broker will help you plan and execute your project in the most cost-effective and profitable way, offering advice and guiding you through the whole process.

The average high street mortgage broker will handle just one self-build application annually. Specialist brokers deal with them every day and are far better equipped to provide the inside knowledge and scrutiny you need.

The brokers we work with have whole-of-market access and are specialists in their fields. Contact us to speak to an expert about your self-build mortgage application.

Other eligibility factors to consider

It’s not possible to give a complete rundown of everything that lenders will consider when assessing your application, as some will be unique to your project. But it’s worth noting that the best rates are reserved for projects and applicants who best match a lender’s attitude to risk.

Some of the things to consider when choosing the right lender (and subsequently the right rate) are:

• Deposit – The bigger, the better.
• Self-build type.
• Method of construction – Non-standard constructions will have a limited pool of lenders
• Credit history – Bad credit won’t necessarily outweigh a solid project proposal but will be considered by lenders.
• Age – Most lenders have an age cap for borrowers.
• Exit strategy – How will you refinance to a more affordable mortgage product when the building is complete?

Get matched with a self-build mortgage specialist

There are several complexities to navigate when comparing self-build mortgages, and without an expert eye, it’s easy to miss some small print or get tempted by a headline rate on a product that doesn’t suit your project.

So, finding an advisor who knows this market inside out is essential to making sure you get the right deal. Our unique broker matching service will pair you up with a specialist who has experience securing finance for projects like yours.

To get matched with your ideal broker, call 0330 818 7026 or enquire online.