Specialist provider BuildLoan launches a new lower rate self-build mortgage for borrowers able put in more cash into the home they plan to build.

The self-build and renovation mortgage firm has partnered with Chorley Building Society to offer a new product which lends up to a maximum of 70 per cent loan to cost for loans of up to £600,000 for self build, custom build, renovations and conversions.

The mortgage has a pay rate of 3.80 per cent, which is a two-year discount of 1.44 per cent off the society’s standard variable mortgage rate, currently 5.24 per cent.

The product has no application fee, early repayment charges, or mortgage indemnity fee. However, a fee of 1 per cent of the loan amount is payable to Chorley on completion, which can be added to the loan.

The Livington-based specialist says monthly payments can be interest-only while the home is being built.

The product is only available from BuildLoan for intermediaries, for customers in England, Scotland and Wales.

This mortgage also comes with cost-based stage payments, which means that stage releases are tailored to the client’s project costs, and guaranteed irrespective of valuations carried out by the lender.

BuildLoan says cost-based mortgages remove the risk of a falling valuation during the build process, which can often result in clients receiving less money than expected, leading to lower cashflows.

BuildLoan head of product development and underwriting Chris Martin says the new product will “significantly reduced set up costs for those self builders who are able to contribute more of their own funds to their project”.

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

Chorley head of business development Julie Goodwin says: “We recognise that clients who are able to contribute more to their self-build project represent a lower lending risk.”