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Best self build mortgage rates

A self-build mortgage is one that is specifically designed for those looking to build their own home. Ready to start your project? Our chart below highlights the top self-build mortgage lenders in the space along with the best rates currently available, or for more tailored advice you can speak to our preferred mortgage broker to get your self-build scheme underway.

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Best Self-Build Mortgages

Best Self-Build Mortgages

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<p>We found <strong>20 PRODUCTS </strong>in total, of which <strong>0 have links to providers</strong></p>

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Selecting ‘Provider Links First’ brings all products that you can apply for directly via Moneyfacts to the top of the chart in rate order. Products that do not have an ‘Go To Provider's Site’ button will appear below, again in rate order. Selecting an option from the drop-down will change the chart to list all products in order depending on the option you have selected, with the best rate being at the top. Products that have ‘Go To Provider's Site’ links will still be in the list but in rate position. Selecting ‘Favourites First’ will bring your chosen products to the top of the chart in rate order with those with Provider Links shown first.

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  • Hanley Economic BS Discounted Variable
    Rate
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    5.75%
    5.75% Discounted Variable (collared at 2.00%) for 2 years (2.74% disc)
    reverting to 8.49%
    APRC
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    8.3%
    Max LTV
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    60%
    Product Fees
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    £1,498.00
    Initial Payment
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    £1,321.12
    Total Over
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    Speak To A Broker
  • Suffolk Building Society Discounted Variable
    Rate
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    5.85%
    5.85% Discounted Variable for 2 years (2.59% disc)
    reverting to 7.44% Discounted Variable (collared at 3.00%)
    APRC
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    8.0%
    Max LTV
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    80%
    Product Fees
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    £1,198.00
    Initial Payment
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    £1,333.84
    Total Over
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    Speak To A Broker
  • Suffolk Building Society Discounted Variable
    Rate
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    5.95%
    5.95% Discounted Variable for 2 years (2.49% disc)
    reverting to 7.44% Discounted Variable (collared at 3.00%)
    APRC
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    8.1%
    Max LTV
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    80%
    Product Fees
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    £1,698.00
    Initial Payment
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    £1,346.62
    Total Over
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    Speak To A Broker
  • Penrith BS Discounted Variable
    Rate
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    5.99%
    5.99% Discounted Variable (collared at 3.00%) for 3 years (1.75% disc)
    reverting to 7.74%
    APRC
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    7.5%
    Max LTV
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    75%
    Product Fees
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    £999.00
    Initial Payment
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    £1,351.75
    Total Over
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    Speak To A Broker
  • Saffron BS Discounted Variable
    Rate
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    5.99%
    5.99% Discounted Variable (collared at 3.00%) for 2 years (2.55% disc)
    reverting to 7.54% Discounted Variable (1.00% disc)
    APRC
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    7.6%
    Max LTV
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    75%
    Product Fees
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    £1,050.00
    Initial Payment
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    £1,351.75
    Total Over
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    Speak To A Broker
  • Hanley Economic BS Discounted Variable
    Rate
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    5.99%
    5.99% Discounted Variable (collared at 2.00%) for 2 years (2.50% disc)
    reverting to 8.49%
    APRC
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    8.3%
    Max LTV
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    60%
    Product Fees
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    £999.00
    Initial Payment
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    £1,351.75
    Total Over
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    Speak To A Broker
  • Dudley BS Discounted Variable
    Rate
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    6.09%
    6.09% Discounted Variable (2.90% disc)
    APRC
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    6.4%
    Max LTV
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    80%
    Product Fees
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    £1,000.00
    Initial Payment
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    £1,364.61
    Total Over
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    Speak To A Broker
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    Home insurance

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    Free credit check

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    Home insurance

    Don't forget to protect your home. Compare the best home insurance providers and apply today.

    How much can I borrow? 

    Find out how much you could borrow on a mortgage using our calculator. 

    Free credit check

    It's important to check your credit score before you apply. View your live score for free today. 

  • Hanley Economic BS Discounted Variable
    Rate
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    6.19%
    6.19% Discounted Variable (collared at 2.00%) for 2 years (2.30% disc)
    reverting to 8.49%
    APRC
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    8.4%
    Max LTV
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    80%
    Product Fees
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    £948.00
    Initial Payment
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    £1,377.53
    Total Over
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    Speak To A Broker
  • Saffron BS Discounted Variable
    Rate
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    6.24%
    6.24% Discounted Variable (collared at 3.00%) for 2 years (2.30% disc)
    reverting to 7.54% Discounted Variable (1.00% disc)
    APRC
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    7.6%
    Max LTV
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    80%
    Product Fees
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    £1,050.00
    Initial Payment
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    £1,384.01
    Total Over
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    Speak To A Broker
  • Loughborough BS Discounted Variable
    Rate
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    6.25%
    6.25% Discounted Variable (collared at 3.50%) for 2 years (1.69% disc)
    reverting to 7.94%
    APRC
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    8.0%
    Max LTV
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    80%
    Product Fees
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    £1,499.00
    Initial Payment
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    £1,385.31
    Total Over
    Press for help tip
    Speak To A Broker
Representative Example
Note

Mortgage Advice Bureau offers fee free mortgage advice for Moneyfacts visitors that call on 0808 149 9177 or email moneyfacts@mab.org.uk. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%.

Any contractual relationship will be with Mortgage Advice Bureau.

Disclaimer

Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing.

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Self-build mortgages explained

How do self-build mortgages work?

A self-build mortgage provides you with the money necessary to cover everything you need to build your home, from buying building materials to paying contractors and workmen. Unlike with a residential mortgage, the money will be released in stages, and you’ll only have access to the funds once specific stages of the build are complete (for example once the foundations are laid, the walls built, etc.). This reduces risk for the lender by ensuring that the money is used as intended, but it also means there’s less risk of you running out of money part-way through the build, which could be more likely if you received the funds in a lump sum.

Note that this style of self-build mortgage is known as an arrears type, where payments are made at the end of each stage. This means you’ll need some other form of financing in order to start the project, or will need to fund the initial stage yourself. However, there’s also an advance type, which is where payments are made at the beginning of each stage, but these mortgages are less common.

 

How much could I borrow?

This will depend on a number of different factors, from the lender you choose to your own personal circumstances, as well as whether or not you already own the land. If you do, you can expect to borrow up to 75% of its value to fund the build, but if you don’t, the percentage offered may be less.

Bear in mind that, while building a home is often cheaper than buying a house, unexpected costs can still arise. This is why it’s important to make sure you’re borrowing a sufficient amount, and is why the advice of a specialist broker can be invaluable.

 

How much deposit do I need?

Just as with a residential mortgage, you’ll need to put down a deposit for a self-build mortgage. However, the deposit requirements can be far higher, with self-build mortgage lenders typically expecting a deposit of between 25% and 40%, and some asking you to put down 50% or more.

 

Are self-build mortgages more expensive?

Self-build mortgage rates tend to be higher than for a typical or equivalent loan-to-value (LTV) residential mortgage because of the extra risk involved to the lender, and fees are often higher as well. This is why many borrowers choose to remortgage to a lower rate once the house is completed (bearing in mind any early repayment charges and the cost of any new fees for the remortgage).

However, this doesn’t necessarily mean that self-build mortgages are more expensive overall. The costs involved in building your own home will often be less than if you were to purchase one that’s already built, which means the mortgage itself could be lower and the repayments smaller. You may also find that, once completed, the property is worth significantly more than the initial build cost, allowing you to remortgage to a lower LTV to save money for the long-term.

 

Are self-build mortgages hard to get?

Self-build mortgage lenders will each have their own specific requirements about who they’ll accept, and you will need to meet their affordability requirements in exactly the same way as you would for a standard residential mortgage. Ensuring you have a stable regular income, a good credit score and few to no debts will help towards being accepted for the best self-build mortgage rates available.

 

Should I speak to a self-build mortgage broker?

Given the niche nature of these products, it’s often recommended to speak to an adviser who specialises in self-build mortgages. That way you can be sure you’re getting advice that’s tailored to your unique requirements, while also giving you access to self-build rates that would be difficult to source elsewhere. Find out more about why you should use a mortgage broker in our guide, or speak directly to award-winning brokers at Mortgage Advice Bureau, our preferred mortgage broker.

 

MAB is the preferred mortgage broker of Moneyfactscompare.co.uk

 

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Call 0808 149 9177 or request a callback

Mortgage Advice Bureau offers fee free mortgage advice for MoneyfactsCompare visitors that call on 0808 149 9177. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm excluding bank holidays. Calls may be recorded.

Your home may be repossessed if you do not keep up repayments on your mortgage.

 

 

What UK banks offer self-build mortgages?

Self-build mortgages tend to be offered by specialist banks and building societies, with few high street names offering such deals. That said, it’s important to keep an eye on the market, as new products can be launched at any time.

 

How to find the best mortgage rate

Comparing self-build mortgage rates using our dedicated chart will be one of the best ways to ensure you get the best deal, as will speaking to specialist mortgage brokers. Our preferred broker will scour their list of self-build mortgage lenders to find the deal that best suits your needs, helping to keep costs down in the process.

Self-build mortgage FAQs

Can a first-time buyer get a self-build mortgage?

As long as you have the deposit needed for the self-build mortgage, as well as meeting the mortgage lenders’ requirements and affordability criteria, then most self-build mortgage lenders will accept applications from first-time buyers.

 

What happens if my self-build costs are higher than the funds issued?

If you find yourself in the position of needing more money to complete a stage of the build you should speak to your mortgage lender to see if they can agree to release funds sooner from a subsequent tranche, or even increase the overall mortgage. If this is not possible, then a bridging loan may be an alternative.

Sometimes credit cards can be used when extra funds are needed, but they should only be used if you can get a 0% interest deal and can pay back the money before interest is added. Personal loans could be another alternative as well. However, it is important that you shop around to find the best rate and make sure you don’t take on more debt than you can afford. Again, seeking specialist advice can make all the difference.

 

Do you pay stamp duty on a self-build?

Yes, but not on the value of the completed property. Instead, you pay stamp duty on the value of the land/building plot itself – and even then, only if it exceeds the nil rate band – which means you could potentially save a lot of money.

 

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Leanne Macardle

Freelance Contributor

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