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Mortgages for Property Development

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Mortgages for Property Development

    • 4.07% Initial
    • 5 year fixed
    • 6.6% APRC
    • Cashback Max £250
      Free Legals
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    • 4.10% Initial
    • 5 year fixed
    • 6% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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    • 4.14% Initial
    • 5 year fixed
    • 6.3% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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    • 4.17% Initial
    • 5 year fixed
    • 6.4% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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    • 4.17% Initial
    • 2 year fixed
    • 6.7% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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    • 4.18% Initial
    • 5 year fixed
    • 6.7% APRC
    • Cashback Max £250
      Free Legals
      Free Valuation
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    • 4.18% Initial
    • 5 year fixed
    • 6.7% APRC
    • Cashback Max £250
      Free Legals
      Free Valuation
    • Get quotes
    • 4.19% Initial
    • 5 year fixed
    • 6% APRC
    • Cashback Max £1,250
      Free Legals
      Free Valuation
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    • 4.19% Initial
    • 2 year fixed
    • 8% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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    • 4.20% Initial
    • 5 year fixed
    • 6% APRC
    • Cashback £0
      Free Legals
      Free Valuation
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Representative example based on a fixed rate mortgage

A mortgage of £375,000 payable over 20 years initially on a fixed rate for 5 years at 4.38% and then at the standard variable rate of 7.65% for the remaining 15 years would require 60 monthly payments of £2,351.88 and then 180 monthly payments of £2,899.55.

The total amount payable would be £663,156.80 which includes interest and product fees of £1,124.

The overall cost for comparison is 6.5% APRC representative.

Early repayment charges may apply.

Mortgages for Property Development

Find the best mortgages for property development

In the event that you are looking to build new properties on a piece of land or are hoping to make extensive redesigns to existing properties - for example, converting non-residential properties into a variety of private homes - you may need the assistance of an expert property development mortgage lender.

The purpose of property development mortgages is to add to a portfolio of properties for the purpose of selling them or renting them out once they are finished. A bridging loan or a self-build mortgage can often be used by those who plan to construct or redesign an individual property for their own use or for resale.

The expertise of a specialist mortgage advisor will assist you in choosing the right type of property development finance deal.

 

When selecting a mortgage for property development, what should I consider?

You can fund your building or renovation ventures in a variety of ways, and the best option for you will depend on a variety of factors, including:

If you can demonstrate a good track record of following through with renovation projects and successfully letting or selling them on, this will go a long way to reassure potential mortgage lenders.

  • A habitable property is one that has functioning facilities, such as power and a water supply, and which is secure from the outside against the elements and to prevent intruders, regardless of whether the property is in a liveable state at the time the mortgage is arranged.

  • An example would be the conversion of a derelict factory building into executive apartments.

  • Some property development mortgage brokers will offer an advance to support the purchase of the land you require, and then provide the remainder of the mortgage money to fund the development.

 

When deciding whether to offer mortgages for property development, what factors will lenders consider?

Fundamentally, every mortgage provider needs to be confident that they will be able to recoup their cash if the property needs to be sold in the future.

Because of clear reasons, mortgage lenders are more hesitant to lend on property development mortgages than on standard mortgages –instead of requesting a mortgage based on the value of a current property, you are requesting an estimated potential value of a property that has not yet.

Mortgage providers for property development are therefore required to consider the following criteria before approving a mortgage for property development:

  • There are some mortgages for property development that require you to have a fund of around 30% to 40% of the overall budget. A mortgage supplier may be willing to offer high sums of money on more flexible terms to an experienced property developer who has an established track record of successful development and a substantial portfolio.

  • The intended use of the property - the decision to lend may depend on whether you are looking to finance residential or commercial development. Furthermore, many property developers today want to create buildings that offer both commercial and residential space - for example, they want to build a building with both commercial and residential space. 

To investigate your finance options call our broker team or fill in our call back form -  speak to our independent mortgage broker team who will be able to offer impartial advice or you can call us on 0117 403 3464

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