Author: rachelreeves

Custom-build mortgages

Anyone can have a custom-build home: from first-time buyers to families and downsizers, there are options for every need and custom-build mortgages are readily available to finance the build.

While those who are downsizing may be able to finance their new home from the sale of their existing property or savings, many people need to arrange a mortgage.

However, when you are ordering a custom-build home (or self building) obtaining finance is not the same as getting a mortgage for an already completed home. Instead, you will need to arrange a specialist custom-build mortgage, which releases funds at specific stages of the build.

At Hugr, we work with trusted self-build mortgage lender Mayflower Mortgage And Finance, which is a specialist in the sector and, like us, is a member of the National Custom and Self Build Association (NaCSBA).

Custom-build mortgages are a complex area of finance. Being accepted for a self-build mortgage is, in fact, quite subjective and the offer will depend not just on the applicant, but the overall build project itself.

Custom-builders can usually borrow up to 75% of the cost of the land and 60% of the cost of the actual building. Typically, a 20-25% deposit is required against the whole scheme, although it can be possible to borrow up to 95%, depending on individual circumstances.

In 2021, the government also strengthened its support for custom and self-build homes by introducing the Help to Build Equity Loan scheme.

This enables buyers of custom or self-build homes to arrange an equity loan of between 5% and 20% (although up to 40% is available for London) of the estimated costs to buy the land, if that is required, and the cost of the build.

To apply for an equity loan, buyers need:

● deposit of at least 5% of the estimated land and build costs
● 95% self build mortgage from a lender registered with Help to Build based on the estimated costs.

Eligible borrowers can spend up to £600,000 on their new home, which includes land and build costs, with a maximum £400,000 for the build. This cost must exclude VAT and any contingency fund you may have.

This equity loan is interest free for the first five years, and a management fee of £1 per month is payable. From year six, interest and the management fee is payable.

Custom-build mortgages can seem a little daunting, which is why we happy to refer plot-buyers to Mayflower: it has exceptional experience and knowledge, which means it is always able to provide the very best advice and find the best and most competitive lenders.

Its website also has a handy toolbox to help plot buyers understand how the financing works and how they can access the mortgage they need to complete the building project.

You can get in touch with Mayflower directly, but if you are already talking to us about one of our development sites, we will be more than happy to introduce you.

We and our plot buyers have had excellent service from Mayflower. Most recently, we worked with it at Wellbank, in the Lake District National Park, which is one of our larger developments.

Together, we put together a panel of lenders that have already examined the development and in principle have approved lending on the site. This enables buyers there to speed up their mortgage application process.

Wellbank is also eligible for the Help to Build Equity Loan scheme.

If you are interested in finding out more about a custom-build Hugr Home, contact our friendly team today, email: or telephone: 07540 754153.

Help to Build launches

Potential homebuyers who are priced out of the local housing market in England now have a new option to consider, after the government launched the Help to Build equity loan scheme.

Backed by £150 million of funding, the Homes England scheme will enable people to build their own homes – via the custom build or self-build route – which can be considerably cheaper than buying an existing property or one off-plan from a developer.

It means even if buyers have only a small deposit, they can start to realise their dream of owning a property.

Home-builders need to be able to put down a deposit of at least 5% and then they can apply for an equity loan of between 5% and 20% (or up to 40% in London).

The remaining 95% must be funded with a self-build mortgage from a lender registered with Help to Build.

This compares to the usual self-build process that sees buyers having to put down a 25% deposit for land and build costs before they can even apply for a mortgage.

Anyone applying for a custom or self-build equity loan will be allowed to spend up to £600,000 on their new home, including any land purchase, if applicable. However, the maximum that can be spent on the building costs is £400,000 (excluding VAT).

This means, for example:

You buy the land for £150,000

Build costs are £250,000.

Total = £400,000

You secure an equity loan between 5% (£20,000) and 20% (£80,000).

The rest comes from a mortgage from a specialist lender registered with Help to Build.


No interest is paid on the equity loan for the first five years, but you are required to pay £1 a month management fee by direct debit. In year six, you pay 1.75% interest and this increases each April when you pay the Consumer Price Index (CPI) rate of inflation from September of the previous year plus a further 2%.

Things to note

There are some important considerations to be made and a few restrictions with the scheme.

Anyone applying for the equity loan must use the house as their main property – this funding cannot be used for second homes.

Applicants for the Help to Build equity loan must be over 18 and must be eligible to live in England.

If you take out an equity loan, you must repay it in full, plus interest (after year six) and management fees, if you: come to the end of your equity loan term, which is usually 25 years; if you sell the property; you repay your repayment mortgage; or you do not keep to the conditions of your equity loan contract.

Custom build with Hugr Homes

The Help to Build equity scheme could deliver between 30,000 and 40,000 homes a year.

As a specialist in small, high-quality custom builds, we help people achieve their dream home through our affordable, low energy and carbon neutral housing that’s designed around the needs of people and the community. You can find out more about us here.

We pride ourselves on innovation and doing things differently. We constantly seek out new methods or technology that will deliver a better standard home at a lower cost.

We want people to live in individual homes that exude character and are built to suit their lifestyles – the opposite of the copycat properties that new house builders produce up and down the country.

Our approach considers the sites on which we buy land, the history of the areas and which designs and materials will work best. It is what we have done for  many years and our happy home owners demonstrate our success.

We work with you: we can deliver a ‘full turnkey’ package, delivering the entire project to your specification or you can choose a ‘wind and watertight’ option that delivers the facade, roof, doors and windows and leaves you to complete the interior in your own time.

Find out more about our current custom build developments.

Find out more about the Help to Buy equity loan scheme.

If you want to find out how you can use your Help to Build equity loan with Hugr Homes, contact the team today by emailing or telephoning 07540 754153.