Self build mortgage advice, rates & providers

Looking for a self-build mortgage? We are here to guide you through this exciting project, with tips to get the best rates, using brokers and comparison sites.

The ultimate dream for many people throughout the UK is to build their own home from scratch. While this can be time-consuming, expensive and stressful, the rewards are well worth the hassle. So, if you want to completely design and customise your new home from the ground up, you will likely need to apply for a self-build mortgage.

Today, we will be looking further into UK self-build mortgages, including:

• How to find the best self-build mortgage

• How to find self-build mortgage providers

• How to find a self-build mortgage calculator

• And more

We also have an excellent resource on the cost to build a house, with prices for all the key stages.

What is a self-build mortgage?

If you're early into your research into building your own home and self-build mortgages, you may be wondering what a self-build mortgage is?

To put it simply, a self-build mortgage refers to a mortgage designed to cover the costs when you are building your own home. These mortgages may be a little trickier to find than traditional mortgages, but you will still have plenty of options for self-build mortgage providers if you shop around.

Usually, when you apply for a self-build mortgage, you won’t receive the funds as a lump sum, like you would for a traditional mortgage. Instead, the funds will be released throughout the different stages of your property build.

How are self-build mortgage rates calculated?

After speaking to different self-build mortgage providers, you will be offered a number of choices, each with varying interest rates. If you and a friend both decided to build your own homes, it is unlikely you would both be quoted the same mortgage rate due to a number of factors. But, how are self-build mortgage rates calculated?

Firstly, the amount of funds you are borrowing will affect your mortgage rate. Generally, the less you need, the lower the interest rate will be. In addition, self-build mortgage providers will look at the amount of your deposit, your credit history and the current market conditions.

Tips on how to find the best self-build mortgage

With mortgage rates and terms varying, you may be unsure how to find the best self-build mortgage. There are a few different ways to find great deals, and the below list should help you get a great self-build mortgage:

• Shop around and look at a range of different providers.

• Use a comparison site to quickly find self-build mortgages available to you.

• A broker can help you to get a good self-build mortgage deal. In fact, they often have access to deals you wouldn’t otherwise find.

• It is always important to work out your finances before agreeing to any deal. You will need to know what you can afford and over how long you want to pay.

• Check interest rates for any available mortgages to get the best rates.

• Don’t forget to take mortgage fees into account when you are budgeting.

Using a self-build mortgage comparison site

As we mentioned above, using a self-build mortgage comparison site can help you to find a range of mortgage deals and interest rates. You will need to consider:

• Whether you would prefer to have an interest-only or repayment self-build mortgage.

• If you would rather have a flexible mortgage where you can pay more or less some months.

• Whether to choose a fixed-rate mortgage.

• It is important to always be honest about your finances to avoid future issues.

How to find self-build mortgage brokers

It is very common for self-build mortgage brokers to have access to exclusive deals. So, if you are on a tight budget and hoping to get a great mortgage rate, it is worth considering using a self-build mortgage broker. It is also worth looking into using a “whole of market” broker.

What’s more, some brokers are entirely web-based, while others will speak to you over the phone. So choose one that works for you. Always remember to ask about any fees you will need to pay upfront.

Online self-build mortgage calculators: How much can I borrow?

One of the most important factors when building your own home is knowing how much you can borrow from a mortgage provider. You will want to ensure you stay within your budget during your home building process.

If you're curious, this self-build mortgage calculator can give you a rough idea.

Do self-build mortgages differ if I already own the land?

If you are lucky enough to already own the land on which you are planning to build your new home, this will give you a good head start financially. It is possible to get a self-build mortgage when you already own the land and you may even get a better deal this way.

The funds will still be released to you at different stages throughout the building of your house and you will be able to apply for a self-build mortgage as usual.

Advice for first-time buyers of self-build mortgages

Building your perfect home from scratch is such an exciting process, but as a first-time buyer it can be a little trickier to get a self-build mortgage. There will be first-time buyer self-build mortgages available to you, although you will likely need to put down a bigger deposit. In addition, you will need proof of earnings and good credit history.

Professional help

If you are planning a self-build house project, you will need a range of different tradespeople throughout the process. Using our handy search feature can instantly connect you with trusted professionals near to you.

A great starting place is to contact an architect to help you plan your build. View our guide to architect fees for more details.

Alternatively, if you want to learn more about building your own home, the following guides are bursting with information and prices to assist you:

• Kit house cost guide

• Flat pack homes cost guide

• Rebuild house cost guide

Or, if you are wondering about the cost of building a house, the average price is £2,375 per square metre.

For more building prices, please see our building cost per square metre guide.