These can also be known as stage payment mortgages. Not just for those building a new home from scratch they are also used by people undertaking a major renovation or extension project. Typically, a completed new or renovated property will be 20% to 30% higher in value than the cost of the build.

Some mortgage companies offer specialist mortgages tailored to building or renovating on a brownfield site or to building a very ecologically friendly property.

If you are planning to build or renovate your own home and need finance in the form of a mortgage, it is a good idea to research the mortgage market before you have even found a plot of land. It is a more complicated procedure than for a standard mortgage and the products vary between lenders. The most important variation is that some deals release the money at the beginning, in time to buy the land, whilst some will not release the money until the work is underway.

Other areas to research: advance build mortgages, self build property, self build finance