BuildLoan has launched a new low cost self build mortgage for borrowers with the Chorley Building Society.

The new product is exclusively available for customers in England, Scotland and Wales. It has a pay rate of 3.80%, a two-year discount of 1.44 percentage points on the Society’s standard variable mortgage rate (currently 5.24%).

Available up a maximum of 70% loan to cost, the product is available for loans of up to £600,000 for self build, custom build, renovations and conversions.

There are no application fees, early repayment charges, or mortgage indemnity fees. A fee of 1% of the loan amount is payable to Chorley on completion, which can be added to the loan. Monthly payments can be interest only during the build.

The product comes with cost based stage payments. This means that stage releases are tailored to the client’s project costs, and guaranteed irrespective of valuations carried out by the lender. Cost based mortgages remove the risk of down valuations during the build process, which can often result in clients receiving less money than expected, causing cashflow problems. With this type of mortgage, stage payments can also be released more quickly, as there is no requirement to wait for a valuer to visit the site.

Chris Martin, BuildLoan’s head of product development and underwriting, said: “We are really pleased to launch this competitive new cost based product with Chorley which offers a fantastic low rate and significantly reduced set up costs for those self builders who are able to contribute more of their own funds to their project.

“We are continually working with our lender panel to come up with new and innovative products for this sector.”

Julie Goodwin, the Chorley’s head of business development, added: “We recognise that clients who are able to contribute more to their self build project represent a lower lending risk and we are really pleased to offer this new low rate, low fee product through Buildloan to acknowledge this.”