BuildLoan and Furness launch cheaper self-build line

BuildLoan launched eight new products for freestanding and custom builders funded by the Furness Building Society.

The new products replace the Company’s existing range with the first rates between 20 and 24 basis points lower than previous equivalent products.

As a result, the lowest rate has now dropped from 3.79% to 3.59%.

All products are available exclusively through BuildLoan and provide borrowers with a pre-established funding schedule throughout construction.

The funds are secured, so there is no risk of lower valuations reducing the amount the borrower can access.

Financing is available in arrears or before each stage of the work.

The prepayment option is useful for borrowers with less cash in the bank as well as those who use construction methods such as wood frame construction, which often require larger upfront payments.

The range offers up to 85% of construction costs and up to 80% of the value of the property completed with a maximum loan of £ 750,000.

Highlights include:

  • Funds paid in arrears Discount rate of 3.59% over two years (standard variable rate minus 1.55%) providing up to 85% of construction costs, with a maximum LTV of 80%
  • Prepaid funds 3.75% two-year discount rate (standard variable rate minus 1.39%) providing up to 85% of construction costs with a maximum LTV of 80%

The new product line includes cash back mortgages and free prepayment options.

If the customer completes construction within an ERC period, they can immediately switch to a residential rate with Furness without paying the ERC.

Chris Martin, Head of Product Development and Underwriting at BuildLoan, says, “We have a wide range of products through Furness and these discounted prices provide even greater value for home builders.

“All products offer guaranteed installment payments linked purely the cost of building the customer, giving self-builders the certainty that they will have the money they need when they need it.

“The possibility of switching to a lower rate at the end of construction without paying any ERC is a really interesting feature, which could save a lot in terms of mortgage payments if the client completes the property quickly.

Alasdair McDonald, Head of Intermediate Mortgages at Furness, said: “We know cash is vital for home builders and our products have been carefully designed with BuildLoan to match the funds provided to the client with their build costs.

“This eliminates the risk that their construction will not progress because they don’t have the money available to pay contractors or purchase materials. “

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