Self-build mortgages differ from standard home loans by releasing funds in multiple staged draws as construction progresses. Lenders can often include land purchase, and draws are released either in arrears (after inspection) or in advance (before a stage begins). Typical lending limits are around 75% of build costs or completed value, but percentages and the number of stages vary by lender. Use a specialist broker, agree a clear stage schedule, and verify inspection and documentation requirements.

How self-build mortgages work

If you want to build your own home, a self-build mortgage is structured differently from a standard mortgage. Instead of releasing the full loan as a single lump sum, lenders release money in stages as the project progresses. That staged approach is designed to match payments to construction milestones and to reduce the need for separate bridging finance.

Why choose a self-build mortgage

  • Lenders can include the purchase of land in the mortgage, so you may not need a separate loan to buy a plot.
  • Staged releases help solve cashflow issues during construction.
  • Many lenders allow you to remain in your existing home while the new build is underway.

Staged draws and inspections

Lenders release funds in multiple draws, typically tied to agreed construction stages. A surveyor or inspector usually visits at each stage to confirm progress before authorizing the next payment. Draw schedules vary by lender and by project - specialist lenders and brokers can help structure suitable schedules for your build.

Draws can be arranged either:

  • In arrears: the lender pays after a stage is completed and inspected. This reduces lender risk but can create cashflow pressure for builders.
  • In advance: the lender releases funds at the start of a stage. This eases the builder's cashflow but will be subject to lender conditions and inspection.
Both methods are common; advance payments can be especially helpful if you need funds before work starts on each stage.

How much you can borrow

Lenders typically limit the loan relative to either the cost of the build or the projected finished value. It is common for specialist self-build lenders to lend up to around 75% of build costs or the completed value, but limits vary by lender, borrower profile, and project risk. Confirm the specific loan-to-value (LTV) or loan-to-cost (LTC) limits with your lender or broker before you commit.

Typical number of stages

Draws are usually split into several stages (commonly 4-6; five is often used as a standard example), but the exact number and the definition of each stage depend on the lender and the build specification. Agree the schedule up front and ensure your builder understands the inspection and certification process. 1

Practical tips

  • Use a specialist self-build mortgage broker if you're unsure which lenders suit your project.
  • Agree a clear stage payment schedule in writing and understand what evidence (invoices, photos, certificates) each lender requires.
  • Budget for inspections and possible short-term bridging if timing gaps occur.
  • Check whether a lender will include the land purchase in the same facility or requires the land to be owned first.
Note: some specialist providers and brokers have promoted advance-stage payment methods and tailored products for self-builders. For example, historical claims exist about specific companies pioneering certain payment approaches; verify such origins with the provider if that influences your choice. 2
  1. Confirm typical maximum lending percentages (LTV or LTC) offered by UK self-build lenders in 2025 (commonly cited ~75%).
  2. Verify whether five-stage draw schedules remain the common standard or provide current typical range from market data.
  3. Check historical claim that BuildStore (or any single provider) originated the advance-stage payment method and document source if referenced.

FAQs about Self Build Mortgage

Can a self-build mortgage include the cost of land?
Yes - many lenders will include land purchase in a self-build mortgage, so you may not need a separate bridging loan. Confirm with your lender whether they require the land to be owned first or will provide funds for the purchase as part of the facility.
How are funds released during construction?
Funds are released in staged draws tied to agreed construction milestones. A surveyor or inspector typically verifies progress before each payment. Lenders may pay in arrears (after completion of a stage) or in advance (before a stage starts), depending on the product.
How much can I borrow for a self-build?
Specialist lenders commonly lend up to about 75% of build costs or the projected finished value, but exact limits vary with the lender, your circumstances, and the project risks. Always confirm the lender's loan-to-value or loan-to-cost policy for your case.
How many stages are there in a typical draw schedule?
Schedules vary, but draws are commonly split into 4-6 stages. Five stages are a familiar example, though lenders and projects may use fewer or more stages depending on the build plan.