What is a self-build mortgage?

A self-build mortgage could help turn your grand design into reality. Unlike a regular lump sum mortgage, self-build mortgages release funds in stages as your project progresses. Some lenders release funds after each stage is completed, while others offer them in advance to cover upfront costs.

You can borrow to cover cover the land and build costs, or just the build costs if you already own the land. Whatever the case, staged lending means you only pay interest on the money you’ve actually accessed, which can keep costs manageable. And once the house is finished, some lenders allow you to switch to a standard mortgage without penalty.

From flexible stage payments to interest-only options, different lenders offer different features. Make sure you compare what’s available from different lenders to be sure of getting the best mortgage for your own self-build plans.

Are you eligible for a self-build mortgage?

Fewer lenders offer self-build mortgages compared to regular mortgages, and of those that do, the rules can vary between them. Generally, here’s what lenders will check:

  • Your self-build project: You’ll typically need to provide detailed construction plans, including the building design, materials and any structural or planning certifications. Lenders will likely also ask for a breakdown of your project costs and a cashflow forecast to make sure the payment schedule lines up with it.

  • Your income: Lenders will look at what you earn when deciding how much to lend. Typically, you can borrow up to four and a half times your annual income, or combined annual income if applying for a joint mortgage. Some providers may offer you more, so comparing is essential.

  • Affordability: You'll need to demonstrate that you can comfortably afford all your mortgage payments, in addition to your other financial commitments like any existing borrowing, utilities and childcare, for example.​

  • Deposit or home equity: You’ll need some cash to put down as a deposit. A lower loan-to-value (LTV) ratio can help you access more competitive rates.

  • Credit history: Whilst there isn’t a specific credit score required for a mortgage, having a higher score can boost your chances of being approved. It might be worth checking to see if there is anything you can do to improve your report before you apply for a mortgage.

Every lender’s a bit different, so it’s very important to compare your options to find the right fit for your situation.

How much can I borrow with a mortgage?

Many mortgage lenders offer up to around 4.5 times your annual earnings, though some may allow you to borrow more. Going off the typical figure, if you earn £40,000, you might be able to borrow up to £180,000. If you apply jointly with someone earning £30,000, that total could rise to £315,000.

Just bear in mind that your final offer will depend on factors like your affordability, existing borrowing and deposit size. Income’s just part of the picture. Here’s what else a lender might look at when assessing your application:

  • Monthly outgoings: Lenders will consider your regular expenses like bills, credit card payments, and childcare costs to make sure the mortgage is affordable.

  • Affordability stress tests: Lenders will check if you could afford your mortgage if interest rates rise.

  • Deposit: The more equity or deposit you have, the better your deal. A lower loan-to-value (LTV) ratio can help you access more competitive rates.

  • Creditworthiness: A solid credit report can really boost your chances of approval, so be sure to check it ahead of your application to see if there is anything you can do to improve your score.

One more thing… your home could be repossessed if you don’t keep up repayments on your mortgage, so make sure you’re comfortable with what you can afford before taking the plunge.

What costs should I budget for when arranging a self-build mortgage?

When applying for a mortgage, remember there are a few costs you’ll need to keep in mind to avoid any surprises:

Survey and valuation fees

Self-build mortgage lenders may want to carry out surveys and valuations at different stages of the build to monitor progress​.

Legal fees

Whether it's a solicitor or conveyancer, you'll need legal help to navigate the process.​ Legal fees are typically around £2,000 (including VAT at 20%), but the exact cost can vary.

Local searches

When buying land, or a property to renovate or rebuild, your solicitor will also carry out local searches – usually costing £250–£300.

Arrangement fees

Some lenders charge a fee to set up your mortgage. Expect to pay anywhere between £1,000 to £2,000 or more. ​

Early repayment charges (ERCs)

Planning to pay off your mortgage early? Be aware of potential ERCs, which can apply if you overpay beyond a certain limit.

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Answering your questions about self build mortgages

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Page updated on 11th September 2025, Reviewed by Richard Groom