The products offer funding up to £600,000 and up to 80 per cent of the client’s project costs. There is also the option to have an interest-only payment structure during the build to help borrowers improve their affordability.
The first product has an initial pay rate of 3.8 per cent for two years, which is a 1.94 per cent discount from Nottingham’s variable rate. This will revert to 4.24 per cent after the fixed period.
The completion fee is £1,499 and there is no application fee.
The second product has an initial pay rate of five per cent, a 0.74 per cent discount for the two-year period. It has no completion or application fee.
The final product is a two-year fixed rate mortgage with an initial pay rate of 3.74 per cent. The completion fee is £1,499 and there is no application fee.
All of the products offer funds released in stages based on the cost of each element of the work. Stage releases are agreed at application and as there are no valuations during the build, the pre-agreed stages are guaranteed once each element of work is complete.
BuildLoan said linking stage releases to build costs rather the value of the site would give clients reassurance that they will receive fund when needed without the risk of down valuations.
Chris Martin (pictured), head of product development and underwriting at BuildLoan, said: “These products take away the cashflow risk associated with some self and custom build mortgage deals which base the stage releases on the value of the site – agreeing the releases based purely on cost takes away this risk and gives clients a huge amount of confidence that they can press on with their build.”
Nikki Warren-Dean, The Nottingham’s head of intermediary sales, added: “Our lending is now linked to the cost of each stage of work, with a guaranteed stage release pattern agreed at application. This cuts out the need for interim valuations, taking away the risk of a customer potentially not getting the funds they expected.
“There can be no underestimating the peace of mind confirmed cashflow can bring – in fact it can be key to a successful and efficient self-build project.”
