What is a self-build mortgage and can first-time buyers get one?

February 26, 2024

Interested in obtaining a self-build mortgage as a first-time buyer?

If you have the vision and passion to build your own home but are concerned about how you’ll fund this massive construction project as a first-time buyer, we can help.

Below, the expert mortgage advisors at UKMC explain how a self-build mortgage works and whether first-time buyers are eligible to apply for this type of mortgage in the UK.

What is a self-build mortgage?

Instead of seeking a loan to cover the cost of purchasing a property, a self-build mortgage is aimed at individuals that want to design and build their own home.

As a result, this type of loan covers the cost of materials, labour, and equipment.

Unlike a traditional residential mortgage where the loan is transferred in full upon the completion date, the lender releases the funds for a self-build mortgage in instalments.

Typically, there are five or six separate instalments which are released at certain stages of the construction project based on what the project is worth at that time.

The value of the build will typically be assessed by a professional at each stage.

However, it’s important to bear in mind that there are two types of self-build mortgages: arrears stage payment mortgages and advance stage payment mortgages.

Arrears stage payment mortgages are more common in the UK. This arrangement involves funds being provided to help purchase the land, and then subsequent instalments following each stage of the build as these stages are individually completed and assessed by a professional.

Advance stage payment mortgages, on the other hand, involve an agreement of funds in advance and are irrespective of lender valuations. As a result, borrowers know how much they’ll receive at each stage of the construction project before work begins.

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

While a first-time buyer self-build mortgage may be uncommon, it is possible for first-time buyers to get a self-build mortgage in the UK.

However, fewer lenders offer self-build mortgages and even fewer of these will offer self-build mortgages to first-time buyers, so you may find yourself presented with far less options than if you were to apply for a traditional residential mortgage.

Explore your options with UKMC’s mortgage advisors

If you’d like to learn more about the pros and cons of applying for a self-build mortgage as a first-time buyer or are keen to explore all your mortgage options, get in touch today.

Our expert mortgage advisors will take the time to fully understand your specific financial circumstances and personal preferences.

We’ll then review your mortgage options accordingly and explain the pros and cons of each arrangement to help you make the best decision for you.

Based in Warrington, our team supports first-time buyers and home movers across the Chesire area as well as further afield. If you’d like to find out more about our mortgage advice services or how our family-run business can help you, please don’t hesitate to contact UKMC.

To speak directly to a member of our team about obtaining a first-time buyer self-build mortgage, you can also call 01925 573328 or get in touch via email by sending your enquiry to However you decide to reach out, we look forward to hearing from you soon!

UK Mortgage Centre is a Trading Style of The UK Mortgage Centre Group. The UK Mortgage Centre Group is authorised and regulated by the Financial Conduct Authority – FRN 826982. Registered in England & Wales: 11614569. As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages. The Financial Conduct Authority does not regulate will writing and taxation and trust advice.