The offering can be accessed through the build store, and its intermediary arm, Buildloan.
A spokesperson from Newcastle Intermediaries told Mortgage Solutions that both the broker via build loan or build store direct will source illustrations from sourcing systems and all the applications go through build store for packaging.
Custom build is a hybrid of self-build and new build, where borrowers buy a plot of land on a development, and can then decide how they want to design and build their new home either themselves, through an architect or a developer.
Maximum £600k
A two-year fixed rate at 5.39% is available at a maximum loan to value (LTV) of 85% with fees of £1,195 to pay with a 10 per cent overpayment facility per year.
Alternatively, borrowers can opt for a two-year base rate tracker, which is currently at 5.19% also available at a maximum LTV of 85% with fees of £1,195 to pay.
A ten per cent overpayment facility per year and an early repayment charge of two per cent until 31 March 2020 and one per cent until 31 March 2021 apply on both products.
Both new products come with a maximum loan amount of £600,000.
The stage payments are in arrears and are based on completed milestones during the custom build, rather than on valuation. To keep costs low during the build, customers can also take an interest only option during their build, reverting to repayment post build.
Local authorities increasing permissions
Stuart Miller, customer director, said: “We’ve supported self-builders since 2012, we are now pleased to expand our proposition into the custom build sector, helping more people create their dream home.
“Custom build offers borrowers the flexibility of a self-build while providing the support of a new build. We only offer this lending through build loan due to the specialist care and additional support they can provide brokers.”
Rachel Pyne, client services director at Buildloan, said the company expects to replicate its success this year, providing products which suit both custom build purchasers and developers.
She added: “This year marks the first year when local authorities are under a duty to deliver planning permissions in line with local demand registers.
“Many authorities see custom build as the only way to comply with the legislation going forward. Around 18,000 extra permissions are expected this year so the Newcastle’s entry is timely.”
