Costs

Ipswich Launches New Self Build Mortgage

13th April 2018

Prospective home builders could now finance their projects through a new self-build mortgage product.

Ipswich Building Society recently introduced the self build loan, which offers a two-year discount and a penalty-free early repayment facility of 50%.

Available to those embarking on new builds, conversions and knock-down and rebuild projects, the mortgages are accessible to both purchase and remortgage customers.

Measured at the Society’s Standard Variable Rate of 5.49%, the product includes a discount of 1.39%, applicable for two years from completion. This makes the effective interest rate 4.1%.

Timber frame self-build home on a sloping plot

Simon and Alison Watkins turned to the Ecology Building Society to finance their self build project. They agreed to lend the couple money in six staged payments

This meant that they could borrow based on the value of what they had on the ground at the time. Click the images to read the full story

Loans are available for up to 80% of the appraised property value, with a maximum loan amount of £500,000. A £1000 fee is chargeable upon completion, along with an application fee of £188, CHAPs fee, and a tiered valuation charge based on the value of the final build.

The product also includes an overpayment facility that allows customers to overpay their original loan amount by up to 50% without incurring any penalty fees. An early repayment change of 3% will apply for the first twelve months, however, this will fall to 0% for the remaining twelve months.

Following the completion of their self build project, customers then have the option to swap to a different mortgage product without charge.

Ipswich Building Society Chief Executive Richard Norrington, said:

“We’re keen to continue supporting self build borrowers, a typically under-served element of the mortgage market, by lowering costs and providing attractive rates with penalty-free switching and early repayment options.

“Our manual approach to mortgage underwriting allows us to remain flexible in offering innovative products to some of the UK’s so-called mortgage misfits, those who are often overlooked by other lenders because they do not meet ‘standard’ criteria for lending.”

Top image: Once planning permission was granted, James and Selina Vickers were able to secure a self-build mortgage to help fund the construction of their traditional masonry home. Read the full story