The new product comes with cost based stage payments which means it is tailored to client’s project costs and guaranteed irrespective of valuations carried out by the lender.

BuildLoan said its cost based mortgages were unique in the market and had the benefit of removing the risk of down valuations during the build process. Indeed, down valuations could often result in clients receiving less money than expected, causing cashflow problems.

With this type of mortgage, stage payments can also be released more quickly, as there was no requirement to wait for a valuer to visit the site.

Chris Martin, head of product development and Underwriting BuildLoan, said: “We are really pleased to launch this competitive new cost based product with Chorley which offers a fantastic low rate and significantly reduced set up costs for those self builders who are able to contribute more of their own funds to their project.

“We are continually working with our lender panel to come up with new and innovative products for this sector.”

The mortgage is exclusively available from BuildLoan for intermediaries, for customers in England, Scotland and Wales. It has a pay rate of just 3.80%, which is a 2-year discount of 1.44% off the Society’s standard variable mortgage rate, currently 5.24%.

Lending up to a maximum of 70% loan to cost, the product is available for loans of up to £600,000 for self-build, custom build, renovations and conversions.

Fees are minimal with no application fee, early repayment charges, or mortgage indemnity fee. A fee of 1% of the loan amount is payable to Chorley on completion, which can be added to the loan. Monthly payments can be interest only during the build, keeping costs low.

Julie Goodwin, head of business development, at Chorley Building Society added: “We recognise that clients who are able to contribute more to their self build project represent a lower lending risk and we are really pleased to offer this new low rate, low fee product through Buildloan to acknowledge this.”