A self-build mortgage allows financing the construction of a home on land owned by the applicant. The main difference with a conventional mortgage is that the holder does not receive the money all at once, but rather the bank delivers it in phases.

It is unlikely that any bank will offer a self build mortgage to a non resident and even for residents, the process can be complicated. 

In addition, to the standard requirements for a mortgage the borrower will have to meet further requirements for example:

• Be the owner of a plot of land that is free from any other encumbrance (ie another mortgage)

• Have arranged a construction company with verifiable experience and an agreed time frame for the build.

• Have planning permission in place for the build.

• Have plans prepared by an architect and validated by the College of Architects of the region where the home is to be built.

• Have a budget for the execution of the work (prepared by the construction company) and have the energy efficiency certificate of the future house (which the construction company will also be in charge of processing at the time).

After submitting the documentation to the bank, an appraisal must be commissioned to find out the hypothetical value of the home once it is built. If the mortgage is approved then the deed will be signed before a notary.

The bank will then gradually deliver the money as different phases of the construction are completed. In total, these phases usually last around two years:

Initial phase. The bank releases around half of the loan to pay the construction company’s downpayment  and the works can begin.

Certification phase. Funds are released by the bank as the architect in charge presents certification on progress of the works to the bank

End of work phase. The architect certifies that the building is finished and the home is habitable. The bank usually delivers around 20% of the total remaining mortgage loan to finish paying the construction company.

Typically during construction the bank only charges the holder interest on the funds received, keeping the instalments low. Once the build is completed the mortgage will include both interest and capital repayments in the normal way.