Mortgage Advisor & Director
Mortgage Advisor & Director
Self-build mortgage lenders can be harder to come by than those offering traditional residential mortgages. However, if you’re looking to build your own dream home, there are options available. Here we look at some of the main self-build mortgage lenders in the UK, and how to get the best deal.
What is a self-build mortgage lender?
There are a wide range of self-build mortgage lenders available across the UK, however, there are often tighter geographical restrictions on this type of loan. Regional building societies tend to offer this type of mortgage deal more often than high street banks, however, there are certainly a few mainstream lenders now offering self-build options.
Many people opt for specialist lenders for self-build finance, as they can have more flexible lending criteria and tend to be more bespoke to the needs of the individual. However, some of these providers, particularly private banks, are only available to high net worth applicants.
The main difference between mainstream mortgage providers and self-build lenders is as follows:
- Self-build lenders offer the loan in staged tranches
- Their deposit requirements are more stringent
- Rates are higher due to the increased risk
- They will often only lend through a mortgage broker
Find your ideal self-build mortgage lender today
Which lenders offer self-build mortgages?
There are a growing number of lenders providing self-build mortgages across both high street and specialist providers, however, criteria can vary wildly from one to the next, so it’s important to be clear on the suitability before you apply. Our knowledgeable team can help you to find the best self-build lender for your needs.
1. Ecology Building Society
Offer up to 80% LTV repayment or up to 65% LTV on a part and part mortgage. They offer reduced rates for eco-friendly constructions and allow non-standard construction, such as timber clad and flat pack homes. However, all projects must achieve an SAP rating of 88.
2. Furness Building Society
A regional building society that was originally founded to serve the North West and Cumbria more than 150 years ago. Self-build applications can only be made through BuildLoan. The maximum LTV is 80% in England and Wales.
3. Newcastle Building Society
The eighth largest building society, Newcastle Building Society offers a range of specialist products including large loans, later-life lending and self-build mortgages. Self-build mortgages offered via BuildStore. Loans are available up to £1m, depending on the LTV.
4. BuildLoan & BuildStore
BuildStore are an expert self-build and renovation agent, providing advice, architects, builders. The offer up to 95% loans towards both development cost and land purchase, through a variety of lenders or their own financing arm, BuildLoan.
5. Dudley Building Society
Offer self-build mortgages at up to 80% LTV and lots of flexibility in terms of applicants, for example, expats and guarantor mortgage applicants are considered. They also consider custom modern and eco self-build properties, as well as self-build with the intent to let
6. Earl Shilton Building Society
Offer self-build mortgages up to 75% of the value of the land and up to 75% of the completed project value. They also have a minimum income requirement of £35k for sole and joint applicants. The rate currently offered is a discount rate mortgage with a 2.5% floor.
Some lenders have geographical restrictions for self-build mortgages, but there are providers who specialise in self-build mortgages in Scotland and Northern Ireland.
Lenders available in Scotland
The lenders below specialise in offering self-build mortgages in Scotland.
- Ecology Building Society - see above for criteria
- Bank of Scotland - Self-build mortgages are offered through their specialist banking services, so a minimum income of £100,000 or savings of £250,000+ are required
- Furness Building Society - criteria is as per the rest of the UK, but they only offer a max of 75% LTV in Scotland
- Scottish Building Society - They offer a maximum LTV of 80% for loans between £30,000 and £600,000. They also consider customers in the North of England
Lenders available in Northern Ireland
The lenders below specialise in offering self-build mortgages in Northern Ireland.
- Ecology Building Society - see above for criteria
- AIB - Offer up to 75% LTV for self-build project in Northern Ireland only
- Bank of Ireland - Offers a cashback mortgage option for self-build mortgages across Ireland with flexible terms, however, these are assessed on a case by case basis
- Progressive Building society - Offers up to 80% LTV but their broader criteria is not widely available
Please note: Lender criteria can change so it's always best to check what the latest requirements are with an experienced broker. For example, Halifax generally offer self-build mortgages, but are not accepting applications at this time.
How to choose the right lender for your self-build mortgage
As you can see, self-build mortgage criteria is varies from one lender to the next. The location of your project can play an important factor in which lenders are available to you, but equally, the type of build and whether or not you already own land will impact your options.
To get the best rates available, like any mortgage application, you’ll want the lowest LTV you can afford, but it’s also especially important to have the most viable project as possible. That’s why it’s a good idea to speak to a broker with expertise in securing self-build mortgages.
At Teito, our expert self-build mortgage brokers can review your project plans to ensure you’re able to meet the criteria of the maximum number of the lenders available in the area of the UK you plan to build in. They will also be able to search the market to ensure you’re getting the best self-build mortgage rates available to you, ensuring you can focus your funds where they’re most needed, perfecting your ideal home.
We offer a free consultation without obligation, and you can look forward to our:
- 5-star rated service from consultation throughout the entire mortgage process
- Broker exclusive self-build deals that aren’t available to the general public
- Self-build finance knowledge across all nations of the UK
- Help with your paperwork and application process throughout
Ready to take advantage of a free, no-obligation chat with a broker who specialises in UK self-build mortgages? Get started here.
FAQs
There are certain high street lenders offering self-build mortgages, but this is largely through a broker and often through their private banking or specialist lending providers. For example, Lloyds offers self-build mortgages through their private banking arm, however, this is only available to an income of £100,000+ per year or savings in excess of £250,000.
Santander provides up to 100% self-build mortgages through Banco Santander, but the criteria are fairly strict and you must own the land already. Nationwide and Barclays do not currently offer self-build mortgages, and HSBC sometimes does as a broker-only deal, however, availability varies.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.