Scottish Building Society offers mortgages for people looking to build their own home.
People looking to build their own residential property in Scotland.
The Society will not normally consider applications where construction of the property has already commenced.
Release of funds:
For a Self-Build Mortgage, funds are released in stages after each section of work is complete. The list below is a typical example of how this might happen but we can be flexible, depending on the type of build and the applicant’s circumstances:
- Purchase of land/plot (when full planning permission received)
- Foundations laid (timber kit purchased, if applicable)
- Up to eaves level
- Wind and watertight and roof tiled
- Plastered Out (electrics, joinery, plumbing & external work complete)
- Completion (internal fittings complete i.e. kitchen, bathroom and central heating installed.)
Each tranche of funds is released when confirmation is received from our Valuer that the stage has been completed to a satisfactory standard. If the construction is being supervised by an architect then they will also have to issue an interim certificate.
The initial release granted on land will be a maximum of 60% of the value of the land at the discretion of the Society, though on occasion it may be appropriate for the Society to consider a lower initial LTV given the location of the property.
The property build must be carried out by a builder registered with the National House Building Council (NHBC). Alternatively, the build must be covered by Premier Guarantee or the borrower must employ an architect or a RICS qualified surveyor with professional indemnity insurance to supervise the build.
If the build is on an all trades basis – we will require a suitably professionally qualified project manager to supervise the project and budget.
We will lend up to 80% of the total cost of the land and construction cost or the value of the house upon completion (whichever is lower) for loan amounts up to £350,000 (£400,000 for loans up to 70%).
The value of the land, if already owned and debt free, may be included in the borrower’s contribution. We would normally expect to see a cash contingency of 10% of the total build costs to be available.
Applicants must be at least 18 years old on application and the maximum age at end of the mortgage term is normally 70.
Minimum mortgage term is 5 years and maximum term is 40 years.
How much can I borrow?
All mortgage applications are based on affordability. As a guide we will lend up to:
- Main income x 4.5, plus second income x 1 OR
- Joint income x 3.5
Any existing financial commitments will also be taken into consideration when affordability is calculated.
Capital and Interest
A first charge will be taken over the land and property being built as security for the mortgage lending.
Overpayments of up to 10% of the mortgage advance can be made per annum. An early repayment charge, equivalent to 3% of the total amount overpaid, will apply if overpayments exceed 10% of the loan amount in any 12 month rolling period during the first 3 years of the mortgage.
On production of the completion certificate the Society can offer any front line product available at that time with no arrangement fee.
You must ensure specialist self-build insurance is in place prior to commencement of the project.
FOR INTERMEDIARY USE ONLY