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What is a Self Build Mortgage and How to Secure One?

Company: The Nottinghamshire Building Company | Author: Rick Brown | Publish Date: 24/04/2025 | Read Time: 9 minutes

Hands shaking after agreeing a Self Build Mortgage

Self build mortgages are designed for individuals who wish to construct a new property from the ground up. Unlike traditional mortgages that finance an already built home, these loans release funds in stages corresponding to construction progress. This method allows lenders to maintain oversight while borrowers manage a phased build. Families planning a custom home or a significant home extension benefit from this structure because it provides flexibility in financing while keeping construction costs under control. Additionally, incorporating expert financial planning and architectural advice during the application process can simplify securing a self build mortgage.

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What is a Self Build Mortgage and What Exactly Is It For?

A self build mortgage is specifically intended for covering the costs associated with constructing a property on land that may not yet be developed. This finance option supports a range of construction projects—from building a modern family home with cutting-edge energy efficiency to adding spacious extensions that accommodate changing family needs. Lenders review detailed building plans, cost estimates, and planning permissions before committing funds, which helps demonstrate a clear, achievable project blueprint. For families who want their home to reflect personal style and functionality, this type of mortgage offers a practical means to fund your project.

How Does a Self Build Mortgage Work?

Instead of handing over a complete lump sum, lenders release funds according to pre-agreed construction milestones. First, you submit a thorough project plan including designs, budgets, and planning permissions. When the build reaches specific stages—such as after the foundation is complete, once the frame is erected, or at roofing completion—an inspector reviews the progress. This confirms that funds can be unlocked for the next phase. This stepwise approach minimises risk for both the lender and the borrower, allowing for efficient tracking of progress while maintaining financial control.

Is It Easy to Get a Self Build Mortgage?

New custom built home funded using Self Build Mortgage

Securing a self build mortgage can be more challenging compared to a standard home loan. The lender’s assessment is more extensive because the property does not yet exist. Required documents often include:

  • A comprehensive construction plan
  • Detailed cost breakdowns
  • Valid planning permissions
  • Confirmed quotes from reputable contractors

By preparing these documents well in advance and consulting industry experts, your application stands a greater chance of approval. Presenting a clear, persuasive plan also builds lender confidence in your project.

Before Applying for a Self Build Mortgage?

Prior to application, address the following key elements:

  • Planning Permission: Obtain all local authority approvals to demonstrate a legally compliant project.
  • Detailed Budget: Create an accurate, itemized cost plan that covers construction phases and potential contingencies.
  • Project Timeline: Develop a realistic timeline that outlines each construction milestone.
  • Architectural Drawings: Secure professional designs and technical drawings to support your plans.
  • Qualified Contractors: Collect detailed estimates and contracts from trusted builders.

Taking these steps ahead of time proves to lenders that your project is comprehensively planned and financially sound.

How to Find Building Plots and Land to Build On

Finding the ideal plot is essential for the success of your self build project. Here are some strategies:

  • Local Estate Agents & Land Brokers: Consult experts who specialise in land sales in Derbyshire and Nottinghamshire.
  • Council Auctions: Monitor local council websites for land opportunities and competitive deals.
  • Online Property Portals: Use search engines to find dedicated property websites that list plots suitable for construction.
  • Networking: Build relationships with local builders and developers who may have insider tips or unlisted opportunities.

Combining these methods can help you secure a site that meets both your geographical and developmental requirements.

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How Much Deposit Do You Need for a Self Build Mortgage?

Self build mortgages typically require a larger deposit than traditional home loans. Deposits might range from 20% to 40% of the total project cost. This is because lenders assume additional risk when funding properties that are built in stages. A higher upfront payment demonstrates your financial commitment to the project and can positively influence the mortgage approval process. Consult a mortgage advisor to discuss your individual situation and determine the deposit requirements that suit your project’s scope.

Is Self Build Cheaper Than Buying?

There is a common belief that constructing a new home is always more affordable than purchasing an existing one. However, this is not always the case. When building from scratch, you have the freedom to integrate cost-saving measures such as modern insulation and energy-efficient systems. On the other hand, self build projects can also incur unexpected expenses if changes occur during construction. For many families, the benefit lies in achieving a living space that suits specific needs rather than saving on initial purchase cost. A clear cost-benefit analysis that factors in long-term benefits versus short-term expenses is essential to making an informed choice.

How to Apply for a Self Build Mortgage

Kitchen island in custom built home built using a Self Build Mortgage

The application process involves several stages:

  • Documentation Collection: Gather all necessary plans, quotes, planning approvals, and financial records.
  • Lender Consultation: Find a specialist lender who understands the intricacies of self build financing.
  • Formal Submission: : Present your detailed project plan and confirm your deposit details.
  • Stage Assessments: Anticipate periodic inspections which will allow funds to be released upon meeting each construction benchmark.
  • Ongoing Communication: Maintain regular updates with your lender so that any changes in plans or timelines are communicated effectively.

Following a systematic approach streamlines the process and helps accelerate financing.

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How We Can Help and Advise

At The Nottinghamshire Building Company (TNBC), our deep understanding of construction in Derbyshire and Nottinghamshire means we’re ideally placed to support you through your self build journey. Our services include:

  • Expert Consultation: From initial design to final construction, we offer in-depth guidance through every stage.
  • Project Management: We work with trusted contractors and subcontractors to keep projects on track and on budget.
  • Financial Assistance: We can advise on mortgage options and connect you with specialist lenders who are experienced in self build finance.
  • Customisation Options: Whether you desire a spacious modern family home or a significant extension for additional functionality, our team collaborates closely with you to achieve your vision.

Partnering with TNBC means gaining a knowledgeable advisor who is committed to turning your construction goals into reality. Call us now on 07411 664543 or email us at dave@nottsbuilding.co.uk.

Other Useful Blogs & Links

Derbyshire CC Planning Permission Advice
The Custom Home Building Process
Energy Efficient Custom Built Homes