Comparison of Advance and Arrears Stage Payment Mortgages
The Accelerator advance stage payment mortgage provides lending of up to 95% of the cost of the land and 95% of the cost of the build with stage payments on the build made at the start of each build stage rather than at the end. An arrears self build mortgage will typically lend 75% of the land cost and 75% of the build cost with stage payments made after each stage is completed.
The chart below shows the effect on the funding for a traditional brick and block construction of the advance and the arrears stage payments. Although both products are lending the same amount by the end of the project, the timing of the stage payments has a major effect on cashflow during the project. If you choose an arrears stage payment mortgage you will need access to more cash during the build than if you use the advance scheme.
Which one is right for you?
How do you decide which is the right type of mortgage for you? Our advisors will recommend products once they fully understand your project and your circumstances but if you answer yes to the following questions then an advance stage payments product may be most suitable:
- Would you like to build your own home but don’t have access to enough cash to pay the deposit on the land plus the cost of the foundations?
- Would you like to stay in your existing home while you build your new one?
- Do you need to borrow a large percentage of the cost of the land?
- Do you want to buy the land prior to obtaining detailed planning permission?
- Do you want to have more control of the cashflow during your project?
Call one of our advisors now on 0845 223 4888 to discuss your requirements or request a call back online.
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