Self-Build Mortgage Can Be Used To Fund Renovation | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

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Derin Clark

Derin Clark

Online Reporter
Published: 12/06/2020

Being forced to stay at home during lockdown has resulted in many homeowners looking at ways to improve their properties and potentially increase the property value by carrying out a renovation or conversion project.

While small, non-structural renovations and conversions can usually be carried out using a personal loan or remortgaging at a higher loan-to-value (LTV), those looking to completely renovate or convert an existing property will often need to borrow more money than a personal loan will provide. For those in this position a self-build mortgage could be a good option.

Can a self-build mortgage be used for a renovation project?

Whether or not a self-build mortgage can be used for a renovation project will depend on the lender. Some lenders will only allow their self-build mortgage to be used for the building of a new property, but others will allow the mortgage to be used to finance a renovation or conversion project. The best way to ensure that the self-build mortgage can be used for conversion or renovation projects is by speaking to a specialist mortgage broker.

What are the self-build mortgage rates?

While standard mortgage rates are at record lows at the moment, in part due to fierce competition within the market and a historic low base rate, self-build mortgages offer significantly higher rates. This is due to these types of mortgages being seen as much more specialised lending than standard mortgage lending. As well as this, self-build mortgage rates are unlikely to fall over the next few months as lenders are more cautious during times of economic uncertainty.

At the moment there are only 27 self-build mortgage deals available with rates starting from 2.59%, but there are up to 60 mortgage deals currently available that could potentially be used for a renovation or conversion project. Although lenders are cautious at the moment, some are returning to the market. For example, today The Nottingham announced that its was launching two 80% LTV mortgage deals that could be used for conversions and renovation projects, as well as self-builds.

Eleanor Williams, finance expert at, said: “Due to the recent lockdown, many people have been spending far more time in their homes than before. Understandably, this extra time in our properties may have led many to realise that there are changes they wish to make to their property, whether that is to facilitate using the space for new or different purposes –perhaps working from home or home-schooling or simply improving or extending their existing home.

“Self-build mortgages are one way of raising the money to renovate, as well as building a new property from scratch. They may seem a little complex but can provide flexible funding with cash being released at certain pre-determined stages of a project. There are other financial products which may be suitable as well, and therefore anyone considering exploring these options would do well to speak with a qualified, independent financial advisor, who would be able to help navigate the various options and give support and advice around the process.”


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