Stage payments

Stage payment mortgages are specifically designed to suit the needs of homebuilders.  BuildLoan offers a range of solutions for every project type and our products offer unique benefits you won’t find elsewhere.

How stage payment mortgages work and the different types available.

Stage payment mortgages differ from traditional mortgages as they release funds in stages, rather than as a lump sum, either in arrears or in advance.

Depending on your clients’ individual project and circumstances, their stage payments will either be cost based – guaranteed based on their project costs, or valuation based – relying on an uplift in value at each stage.

BuildLoan offers a range of solutions for every project type.   Advance stage payments and cost based mortgages are exclusively available from our panel of lenders.

 

COST BASED STAGE PAYMENTS

BuildLoan’s unique cost based mortgages offer guaranteed stage payments based on your client’s build costs, either before or after each stage of works, depending on their payment schedule and irrespective of lender interim valuation figures.  This gives you and your client complete certainty in their budget, and peace of mind knowing they’ll have the cash they need when it’s needed.

Higher loan to cost (LTC)

More money for your clients during the construction period – up to 95% on land and up to 95% on build costs

Guaranteed stage payments

Guaranteed stage payments in arrears or in advance

Tailored cashflow

Mortgage tailored to suit your client’s individual payment schedule

Interest only payments

Interest only available during the build and only payable on funds as drawn down

Range of products and lenders

Access to a range of exclusive mortgages and lenders

VALUATION BASED STAGE PAYMENTS

Valuation based mortgages release funds upfront to purchase the plot, and then after each stage of works is complete.  With BuildLoan, clients can borrow up to 85% on project costs (compared to 75% for most other lenders).  Each stage release is reliant on a valuation taking place which shows an uplift in value.

 

Higher loan to value

Borrow up to 85% on land and build costs compared with 75% from most other lenders

Stage payments subject to valuation

Stage payments in arrears and subject to an uplift in value

Interest only payments

Interest only available during the build and only payable on funds as drawn down

Range of products and lenders

Access to a range of exclusive mortgages and lenders

TYPICAL STAGES

The following chart shows the typical stages in a traditional brick and block construction and in a timber frame construction.  With a stage payment mortgage, your client only pays interest on funds as they are drawn down rather than on the full amount.

If your client has chosen an off-site manufactured construction type, they may need to pay for the structure in full before it leaves the factory – so they’ll need access to funds in the early stages of the build.

STAGE
1
2
3
4
5
6
BRICK & BLOCK
Purchase of Land
Preliminary costs & Foundations
Wall plate level
Wind & watertight
First fix & plastering
Second fix to completion
TIMBER FRAME
Purchase of land
Preliminary costs & foundations
Timber frame kit erected
Wind & watertight
First fix & plastering
Second fix to completion
RENOVATION/CONVERSION
Purchase of property
Preliminary costs & structural overhaul
Wind & watertight
Plastering & services
Second fix to completion