Self-Build Mortgages in Northern Ireland

Self-build mortgages are more complex than standard residential mortgages, but that shouldn’t deter you from your dream of building your own home. If you’re looking for this type of funding in Northern Ireland, you may find some high-street banks reluctant to lend.

But there are still plenty of options, particularly if you’re looking at a project in Belfast or another major city.

In this article, we’ll look at self-build mortgages in Northern Ireland compared with the rest of the UK and where you can find the right advice to secure the best deal.

Can you get a self-build mortgage in Northern Ireland?

Yes. Self–build mortgages are usually the best way to borrow for properties in the UK, including Northern Ireland. They are different from standard mortgages in that the money is released in tranches as the project develops, usually over a period of up to 18 months.

Are they different from the rest of the UK?

Sort of. The application process is the same, irrespective of where you live. However, when looking for any type of mortgage in Northern Ireland, you will find that your choice of lender is limited compared with borrowers in the mainland UK.

This can be exacerbated if your planned project is not in or around one of the major urban areas, as some lenders will not lend in certain Northern Irish postcodes.

Add the self-build element into the mix, and your options are further restricted. That’s why it makes sense to speak to a broker who can help guide you through the complexities of self-build mortgages and one who is knowledgeable of the local market for the best deal available to you.

Grants and schemes available

There are several grants and schemes available that can assist those looking to build a property in Northern Ireland to ensure their new build is energy efficient:

How to get a self-build mortgage in Northern Ireland

Follow these steps to get the best deal on a self-build mortgage in Northern Ireland.

Get your documents in order

In addition to checking the standard mortgage application paperwork and affordability checks, self-build lenders need to assess the viability of your project.

They will first need to see that you have purchased the land. Self-build mortgages rarely cover the cost of buying land, so if you still need to purchase the plot you intend to build on, read our guide to development finance.

Once you own the land, you will need to provide potential lenders with evidence of:

Calculate your projected costs

This is usually done alongside arranging your documents, but it makes sense to review the finances again once you are satisfied with the project details. As a guide, a typical self-build project in Northern Ireland will cost between £600 – £1000 per square metre.

Don’t forget to include a contingency amount to cover any unexpected costs that arise.

Think about living costs too. Lots of people stay with family while their new property is being built. But if you are still paying a mortgage or renting somewhere, this will impact your affordability.

As self-build mortgages are seen as higher risk, you will usually need a deposit of around 30%—40%.

Good financial projections will help you avoid borrowing too little, running out of funds, or paying more interest than necessary. If you need expert advice on calculating your project’s full cost, just ask.

Speak to an expert self-build broker

Ideally, you should find a broker who understands the local mortgage market and self-build financing. They can help with all aspects of the project, from planning the project to refinancing your self-build mortgage to a standard product.

We work with brokers who specialise in self-build mortgages in Northern Ireland and have extensive experience securing finance for all types of new-build projects. Contact us today to chat with an expert.

Which lenders offer them?

This is a niche lending area, with only a handful of lenders available to approach. Nonetheless, with a strong application and viable project, there is no reason you shouldn’t be able to find a lender. For example, Progressive Building Society only lends in Northern Ireland and offers self-build loans.

While some mainstream banks, such as Natwest and Santander, offer mortgages in Northern Ireland, they don’t lend for self-builds in this part of the UK. However, AIB and Danske Bank will consider applications.

The trick is to identify the right lender according to your circumstances and package your application to suit their requirements.

What interest rate to expect

Any loan type considered higher risk is likely to incur higher interest rates. That said, a self-built home is typically worth more as a finished property than the cost of building it. So, providers are happy to lend where they are convinced about the value of the project.

Rates for this type of loan in Northern Ireland are usually between 3% – 7%. Interest-only and capital repayment options are available, and you would typically look to refinance your loan on completion of the project. Your broker can help you determine the most cost-effective way to complete your project.

Speak to a Northern Ireland self-build mortgage specialist

The more specialist an area of lending, the more important it is to make sure you get sound advice. As stated earlier, a solid plan is likely to appeal to providers who offer self-build mortgages in Northern Ireland, but those lenders aren’t always easy to find on your own.

Our unique broker matching service will assess your circumstances and pair you up with a specialist broker who has extensive experience helping people in your situation get the best deal on a self-build mortgage in Northern Ireland.

To speak to a specialist and start the process of getting your project off the ground, call 0330 818 7026 or enquire online.