The Development Finance Guide to the Help to Build Scheme and Self-Build Mortgages

What the Help to Build scheme is designed to do

The Help to Build scheme is intended to make self-build and custom-build homes more financially achievable. It does this by providing an equity loan from the government, which can reduce the amount you need to raise upfront.

For many borrowers, the key difference versus a standard mortgage is that a self-build project is funded around construction progress. That means you typically need a mortgage structure that can release funds in line with the build programme, rather than all at once.

How the Help to Build equity loan works (in practice)

The equity loan is provided towards the estimated costs of land and construction. It is designed to sit alongside a self-build mortgage (or another form of development finance) so the full project funding is in place.

While scheme rules can change over time, the published guidance includes parameters such as:

• Equity loan size: typically 5% to 20% of the total estimated project cost (with up to 40% for projects in London)
• Interest-free period: the loan is interest-free for the first five years
• Interest after the initial period: interest begins after the initial period and can increase over time
• Project cost limits: there are maximum eligible costs, including caps on construction elements
• Minimum deposit: a minimum 5% deposit is generally required
• Main residence requirement: the completed home must be your primary residence

Because the equity loan is an equity product, your repayment position changes once the build is complete. That makes it important to plan not only for the construction phase, but also for what happens when the project transitions into long-term repayment.

Why you usually still need a self-build or custom-build mortgage

The Help to Build equity loan is only part of the funding picture. You will still need a mortgage or specialist lending to cover the remainder of the land and construction costs.

Self-build and custom-build mortgages are built around the reality that:

• construction happens in stages
• costs are incurred as work progresses
• lenders need confidence that money drawn matches work completed (or is about to begin, depending on the structure)

That is why the interaction between the equity loan and your mortgage structure matters.

How custom/self-build mortgages are paid: staged funding

A conventional mortgage is usually advanced as a single amount. In contrast, self-build lending is often released via stage payments.

Stage payments are designed to align funding with the build plan. They can also influence how quickly you need access to cash at different points in the project.

Two common stage payment approaches

1. Arrears stage payment mortgages

   • Funds are released after a stage is completed.
   • Evidence is usually required that the work has been carried out (for example, inspection or documentation).
   • This approach can suit borrowers who can fund the early stages without needing the lender’s money immediately.

2. Advance stage payment mortgages

   • Funds are released before a stage begins.
   • This can help where you need capital to start each phase of construction.
   • Availability depends on lender appetite and the overall project details.

Which approach is available depends on the lender and the specifics of the build plan, including how costs are profiled and how the project is managed.

Where Help to Build fits alongside stage payments

In many Help to Build/self-build structures, the equity loan and the mortgage work together to ensure the project has sufficient funding across the build programme.

The practical considerations are:

• Timing: staged releases need to fit the build schedule so you are not exposed to funding gaps.
• Budget credibility: lenders and scheme requirements typically expect a realistic budget for land and construction.
• Documentation: you may need to provide build information that supports both the equity loan application and the mortgage drawdown process.

Because the equity loan is tied to scheme rules, the overall plan should be treated as one integrated funding exercise—from land acquisition through to completion and the point when the mortgage arrangement changes.

Build plans, permissions and cost evidence

Specialist self-build lending generally requires more information than a standard residential mortgage. Lenders commonly look for:

• a detailed build plan showing the order of works
• evidence of planning permission (where required)
• professional cost estimates and a realistic overall budget
• confirmation of the land and project structure

Custom-build projects can be more complex where designs, specifications or materials are changing. In those cases, the build plan and cost assumptions need to remain credible as the project evolves.

What happens when the build is finished

Once construction is complete, the financing arrangement usually changes.

In many Help to Build/self-build structures:

• the self-build mortgage is converted into a standard residential mortgage
• repayments for the equity loan begin according to the scheme’s terms

This is an important point in project planning. Your long-term affordability needs to be considered alongside the construction-phase funding strategy.

Benefits of combining Help to Build with custom/self-build mortgages

For eligible borrowers, the combination can offer several practical advantages:

• Reduced upfront funding pressure by using an equity loan rather than relying entirely on your deposit and borrowing
• Mortgage structures aligned to construction through staged lending
• More control over the end result, since custom and self-build routes can be designed around how you want to live

When the build is managed effectively, this can support a more controlled route to homeownership—particularly for projects aiming for modern specifications and improved energy performance.

Challenges to consider before committing

Self-build and custom-build projects can be rewarding, but they also require careful risk management. Common issues include:

• Land availability and suitability: plot constraints, access issues and planning limitations can affect both feasibility and cost
• Planning and approvals: timelines can shift depending on local authority requirements
• Cost and timing uncertainty: unexpected costs and delays can quickly affect overall affordability
• Stage-by-stage funding dependency: if milestones slip, staged releases may be impacted

A robust budget, contingency planning and a realistic programme are often key to keeping the financing plan on track.

Is Help to Build suitable for every self-build project?

Help to Build can make a meaningful difference for some borrowers, but it is not a universal fit. Suitability depends on how the project meets scheme requirements and how the remaining funding is structured through a self-build or custom-build mortgage.

A useful way to think about the decision is to treat the project as a complete funding plan—covering land purchase, construction stages, and the transition into long-term repayment once the build is finished.

Sources

• Help to Build (2025) Customers Guide to Help to Build: Equity Loan (published by UK Government). Available at: https://assets.publishing.service.gov.uk/media/632c3c598fa8f51d2669fa12/Help_to_Build_customer_guide_220922.pdf
• ABC+ Warranty & Architects Certificate (2025) How do stage payments work for self-builds? Available at: https://www.architectscertificate.co.uk/news/how-do-stage-payments-work-for-self-builds/