The building society has also cut its self build rates as well as doubling its loan limits as it predicts "steady growth" in the self build market
Buckinghamshire Building Society have cut their self-build rates(Image credit: Jeremy Phillips)
Buckinghamshire Building Society, a self build mortgage lender, has reduced its self build mortgage rates and doubled the maximum loan limit, now offering up to £1 million.
With a new interest rate of 6.49% and flexible repayment options, the society aims to make self build mortgages more accessible in a market they expect to grow.
We take a look at this mortgage product and what it means for self builders.
Self build mortgage product with lower rates and higher loan limits
Buckinghamshire Building Society has made its self build mortgage products more attractive by lowering interest rates and increasing the maximum loan amount from £500,000 to £1 million.
These mortgages, available through BuildLoan, include options like the Self Build Advance, which is now available at 6.49% instead of 6.59% and Self Build Arrears, which is available at 6.35% instead of 6.49%.
The key difference between the Self Build Advance and Self Build Arrears mortgage products is the timing of stage payments during construction. With the Self Build Advance, payments are made before each construction stage is completed, based on the valuer's estimate, which helps cover upfront costs. In contrast, the Self Build Arrears releases funds only after each stage is finished and assessed.
Buckinghamshire Building Society are not the only lenders to offer both types of self build mortgage product.
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Buckinghamshire Building Society is offering self build mortgages up to £1 million(Image credit: Getty Images)
How does this compare to products from other self build mortgage lender?
When compared with some of the most competitive self build options this offer from the Buckinghamshire Building Society has a few distinct advantages.
The repayment offer of 6.49% interest is higher than the lowest existing offers, with Hanley Economic Building Society and Penrith Building Society offering rates as low as 5.75% and 5.99%. However, these only allow loans up to £500,000 whereas, as mentioned, Buckinghamshire Building Society now allow loans up to £1million.
Additionally, they offer an advance staged release of funds, so the lender releases the loan in phases in advance of each major stage of the build.
Importantly, Buckinghamshire Building Society does not require formal property valuations or impose loan-to-value (LTV) limits during the build. The former is agreed at application stage.
Who can apply for this self build mortgage?
These mortgages are available to self builders in England and Wales. Each application is reviewed individually, including a thorough review of expected building costs to prevent you running out of funds during construction.
Buckinghamshire Building Society predicts "steady growth" in self build numbers
Buckinghamshire Building Society expects growth in the self build sector and aims to help more people achieve their homebuilding goals with these improved mortgage options.
Buckinghamshire Building Society head of mortgages, Claire Askham, says: “With the increased focus by the new Government on building new homes, we anticipate steady growth in the self build sector.
"By reducing rates, plus also doubling our maximum loan size, we hope that this enables more borrowers to achieve their home building dreams.”
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
