BuildLoan has launched eight new products for self and custom builders funded by Furness Building Society. 

The new products replace the Society’s existing range with initial rates between 20 and 24 basis points below the previous equivalent products.

As a result, the lowest rate has now come down from 3.79% to 3.59%.

All of the products are available exclusively through BuildLoan and provide borrowers with a pre-agreed schedule of funding throughout the build. 

Funds are guaranteed so there is no risk of down valuations reducing the amount that the borrower can access.

Finance is available in arrears or in advance of each stage of work. 

The advance stage payment option is useful for borrowers with less cash in the bank as well as those using building methods such as timber frame construction, which often require larger up-front payments.

The range offers up to 85% of build costs and up to 80% of the value of the completed property with a maximum loan of £750,000.

Highlights include:

• Funds paid in arrears two-year discount rate of 3.59% (standard variable rate minus 1.55%) offering up to 85% of build costs, with a maximum LTV of 80%
• Funds paid in advance two-year discount rate of 3.75% (standard variable rate minus 1.39%) offering up to 85% of build costs with a maximum LTV of 80%

The new product range includes cashback mortgages and early repayment charge-free options.

If the client completes the build within any ERC period, they can move straight away to a residential rate with Furness without paying the ERC.

BuildLoan head of product development and underwriting Chris Martin says: “We offer an extensive range of products through Furness and these reduced rates offer self builders even greater value. 

“All of the products provide guaranteed stage payments linked purely to the client’s build costs providing certainty to self builders that they will have the money they need when it is needed. 

“The option to move to a lower rate on completion of the build without paying any ERC is a really attractive feature, which could save a lot in terms of mortgage payments if the client finishes the property quickly.

Furness head of intermediary mortgages Alasdair McDonald says: “We know that cashflow is vital to self builders and our products have been carefully designed with BuildLoan to match the funds provided to the client with their build costs. 

“This removes the risk of their build not progressing because they don’t have the money available to pay contractors or buy materials.”