How staged funding works
Unlike a standard mortgage, the money does not arrive in one payment. It is released in tranches as the build reaches agreed milestones.
Land purchase
The first release, against the plot. You will usually need the largest proportion of your own funds at this point.
Foundations and structure
Released once the substructure is certified complete.
Wall plate and roof
Released when the shell is weathertight.
First and second fix
Services, plastering, joinery and fittings.
Completion and certification
Final release on practical completion, sign-off and warranty issue.
Arrears or advance
Stages can be released in arrears (after the work, verified) or in advance (before it, against a certified plan). Advance release is easier on cash flow; arrears is more common. Confirm which you are getting before you budget.
What we need to see
- Full planning permission and, where required, building regulations approval.
- A detailed costed schedule of works with a contingency, not a single headline figure.
- The builder or main contractor, their track record and their insurance.
- A structural warranty or latent defects policy for the finished building.
- Site insurance covering the works, materials and public liability throughout.
- Evidence of where you will live during the build, and how that is funded.
Contingency is not optional
Build costs overrun far more often than they come in under. We expect a meaningful contingency in the schedule, and so should you.
Terms
| Criterion | Standard position |
|---|---|
| Maximum loan to value | 70% of land plus build cost, or of end value where lower |
| Minimum deposit | 30% |
| Interest during the build | Usually interest-only on the amount drawn |
| On completion | Converts to a standard residential mortgage on the products then available |
| Valuation | Re-inspected at each stage, at your cost |
| Build period | Agreed at the outset, with extensions considered on evidence |
Where these projects go wrong
- Underestimating cost, then running out of funds mid-build with an unmortgageable half-finished property.
- Starting work before planning or approvals are fully in place.
- Choosing a contractor on price alone, without checking references or insurance.
- Forgetting the cost of living somewhere else for the duration.
- Assuming the end value will cover any overspend. Valuers assess the finished house, not what it cost you.
None of this is a reason not to build. It is a reason to have the schedule, the contingency and the contractor settled before the first release.
Next steps
Self-build cases are individually assessed and benefit from a conversation before a formal application. Bring the plans, the schedule and the contractor details.
Documents you may also need
Lending Criteria
What we can lend, to whom, and against what property — published in full so you can check before you apply rather than after.
MortgagesToday's Mortgage Rates
Indicative rates across our fixed, variable and specialist mortgage ranges, and the factors that decide which one you are offered.
MortgagesFixed Rate Mortgages
Your rate and your monthly payment are locked for an agreed period, so the largest bill in your household is a known number.
This document was last updated on 1 August 2026. We publish the current version here at all times; superseded versions are available on request.
If anything on this page is unclear, write to us and we will explain it.