How self-build finance works
Self-build mortgages release money in stages as the build progresses, so you pay interest only on what's been drawn. Once the build is finished, it usually becomes a normal repayment mortgage. This calculator estimates the loan the final monthly payment would support.
Worked example
£1,500 a month at 6% over 25 years would repay about £232,810.30, with £217,189.70 of interest over the term.
Before you build
Budget for costs rising and the build taking longer than planned, and for living costs while it's underway.
Lenders also test the build cost, your planning permission and your income, so the offer may be lower than your budget would suggest.
How the result is worked out
The calculator turns the monthly payment you can afford into the largest loan that payment would repay over the term, using the interest rate you enter, charged monthly at one twelfth of the annual rate.
It assumes a normal repayment loan once the build is finished. Interest during the build, when money is released in stages, is not included.
Inputs for the construction loan affordability calculator
Monthly payment you can afford
The mortgage payment you could manage once the build is complete.
Interest rate (per year)
The annual interest rate on your mortgage. The rate shown is only an example, so enter the rate from your quote.
Term
How many years you'd repay over.
CALCULATOR QUESTIONS
Construction loan affordability calculator questions
How do self-build mortgages pay out?
In stages as the build progresses, rather than as a lump sum.
Do I pay interest during the build?
Usually on the amount drawn so far.
What happens when the build is finished?
It usually becomes a standard repayment mortgage.
Is this a guarantee?
No. The lender decides.