Mortgages for property development

Compare best mortgages for property development

Latest Deal - NatWest 2 Year Fixed »NatWest Mortgages

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1.40%Reverts to 3.99% after 2 years


Overall Cost for Comparison 3.70% APRC. This is the cost of the mortgage over the full term. Early redemption charges may apply.

In order to find the best mortgages for property development, it is important to consider the range of different mortgage deals that are widely available. By comparing these mortgages that are offered by different providers, you'll have the best chance of finding a competitive deal:

Provider

Type

Initial Interest Rate

Initial Term

Max LTV*Product Fee 
Fixed

1.40%

Reverts to 3.99%

2

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.70% APRC. This is the cost of the mortgage over the full term.
Tracker

1.84%

Reverts to 3.99%

2

Years

60%

YesMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.
Tracker

2.07%

Reverts to 3.99%

2

Years

75%

YesMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.
Fixed

1.79%

Reverts to 3.99%

5

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.30% APRC. This is the cost of the mortgage over the full term.
Fixed

1.79%

Reverts to 3.99%

5

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.30% APRC. This is the cost of the mortgage over the full term.
Fixed

3.03%

Reverts to 3.99%

2

Years

85%

NoMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.90% APRC. This is the cost of the mortgage over the full term.
Fixed

2.94%

Reverts to 3.69%

10

Years

80%

NoMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.20% APRC. This is the cost of the mortgage over the full term.
Fixed

4.10%

Reverts to 3.99%

2

Years

95%

NoMore Info >
Early redemption charges may apply. Overall Cost for Comparison 4.10% APRC. This is the cost of the mortgage over the full term.

Representative Example:


A repayment mortgage of £120,000 payable over 28 years and 1 month initially on a fixed rate for 2 years at 1.99% and then on the lender current variable rate of 3.69% (variable) for the remaining 26 years and 1 month would require 24 monthly payments of £465.20 and 312 monthly payments of £565.39 and one final payment of £565.19.


The total amount payable would be £189,357.67 made up of the loan amount plus interest (£68,161.67), booking fee (£999), completion fee (£30) and valuation fee (£197).


In this example the overall cost for comparison is 3.7% APRC representative.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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Compare mortgages for property development


If you want to build new properties from scratch or are looking to make comprehensive renovations to existing properties – for example, altering non-residential properties into a selection of residential dwellings – then you are likely to require a specialist property development mortgage deals. Property development mortgages are intended for people who are developing a portfolio of properties for sale or rental. Individuals who want to build or renovate a personal property are usually able to fund their work using a bridging loan or a self build mortgage deal. An expert mortgage advisor will be able to help you decide which form of property development finance is most appropriate for your situation. 


What factors will I need to consider when choosing mortgages for property development?


There are a variety of ways in which you can finance your building or renovation projects and the most suitable method will depend on a range of factors such as:

  • Whether you are a professional property developer or a private individual.
  • Development scale - the size and the number of properties you wish to build or renovate will be taken into account by lenders.
  • Whether the property or properties are currently in a habitable state – this is usually defined as a property that has functional amenities such as electricity and plumbing, and which can be secured.
  • Whether the property is being converted to a new purpose – for example, a disused warehouse being converted into a block of flats may require a different approach to an existing residential building.
  • Whether you already own the land you wish to develop – some property development mortgage lenders will offer you a loan to fund the purchase of the land you need as well as the cost of the development.
  • If you are building a new property from scratch or making drastic alterations to an existing building, you will need to provide details of planning permission for the type of property that you want to construct. This is especially true if you want to make changes to an unusual property, altering a listed building, or are building in an area with strong planning restrictions.


What will lenders look for when considering whether to offer mortgages for property development?


In essence, every mortgage lender wants to be reassured that they will get their money back in the event that there is the need to sell the property or properties in the future. Mortgages for property development are riskier to lenders than a standard mortgage for obvious reasons – rather than asking the mortgage provider to lend based on the value of an existing property, they are being asked to lend to you based on the estimated value of a property that is not yet in a habitable state, or may not even be in existence at all. Because of this, mortgage lenders are likely to require some of the following criteria to be met before they agree to lend:

  • Many mortgages for property development will require you to have a deposit of around 30% to 40% of the overall budget for the development. However, if you are an experienced property developer with a good track record of developing and letting or selling properties, some mortgage providers may be willing to offer high amounts. 
  • The proposed usage of the property – a mortgage lender’s decision may vary depending on whether you want to borrow to fund a residential property development or a commercial property development. Many property developers seek to create mixed-use property developments – for example, street-level commercial premises with a range of apartment above them – and this could require a more specialised lending approach.

Top 5 Mortgage Deals

Find a selection below of top mortgage deals based on "loan to value" or LTV - so if you have a 25% deposit or 25% equity in your home click on the 75% LTV tab for latest deals

Provider

Type

Initial Interest Rate

Initial Term

Max LTV*Product Fee 
Fixed

1.40%

Reverts to 3.99%

2

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.7% APRC. This is the cost of the mortgage over the full term.
Fixed

1.54%

Reverts to 3.69%

3

Years

60%

YesMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.30% APRC. This is the cost of the mortgage over the full term.
Tracker

1.84%

Reverts to 3.99%

2

Years

60%

YesMore Info >
Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.
Fixed

1.79%

Reverts to 3.99%

5

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.30% APRC. This is the cost of the mortgage over the full term.
Fixed

1.79%

Reverts to 3.99%

5

Years

60%

YesMore Info >
£250 Cashback. Early redemption charges may apply. Overall Cost for Comparison 3.30% APRC. This is the cost of the mortgage over the full term.

Representative Example:


A repayment mortgage of £120,000 payable over 28 years and 1 month initially on a fixed rate for 2 years at 1.99% and then on the lender current variable rate of 3.69% (variable) for the remaining 26 years and 1 month would require 24 monthly payments of £465.20 and 312 monthly payments of £565.39 and one final payment of £565.19.


The total amount payable would be £189,357.67 made up of the loan amount plus interest (£68,161.67), booking fee (£999), completion fee (£30) and valuation fee (£197).


In this example the overall cost for comparison is 3.7% APRC representative.


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

The above mortgage products highlighted on this website are available directly through lenders who will be able to provide further information about the product you are interested in. If you are unsure about what mortgage product is suitable for you, we suggest you speak to an independent mortgage broker