Self build mortgages in Ireland

If you dream of building your own home, a self build mortgage could help make it a reality. Here’s how they work, how much you can borrow, and what insurance you need.

What is a self build mortgage?

It’s a mortgage for people who are building their own home. Self build mortgages work differently to regular mortgages:

  1. With a standard mortgage for a ready built house, the money is released in one go
  2. With a self build mortgage, you draw down the money in stages - for each stage of the build
  3. You only pay interest on the amount you’ve drawn down from a self build mortgage, not the whole loan amount.

How much deposit do you need?

This varies, but usually both first time buyers and second time buyers will need at least a 10% deposit.

The maximum loan to value (LTV) is 90% of the site cost or value, plus the cost of construction or 90% of the valuation on completion - whichever is the lower.

The deposit can depend on:

  1. The lender’s criteria e.g. the maximum amount they can offer you and their maximum loan to value percentage
  2. Whether you already own the site or need the loan to cover this too. If you own the site you may be able to use this as your deposit

What if you own the land?

If you’ve been given land or already own the site, it can be used as your deposit because it will be part of the overall value of the house when it’s built.

You’ll also need at least 10% of the total cost as a contingency for any unforeseen costs.

self build mortgage

How much can you borrow?

Lenders need to be confident you can comfortably afford your mortgage, insurance and bills each month. You’ll also need sufficient savings to cover any unexpected build related expenses.

Since January 2023, the amount first time buyers can borrow changes:

  • A first time buyer can usually borrow 4 x their salary
  • A second time buyer can usually borrow 3.5 x their salary

Work out how much you may qualify for, with our How much can I borrow? calculator. For an accurate quote, you’ll speak to a lender get a mortgage approval in principle.

Who offers self build mortgages in Ireland?

These are the main lenders that offer self build mortgages:

Their lending criteria varies and your personal circumstances will be taken into account. Some lenders offer interest only mortgages for the first 12 months, to help keep costs down in the first year.

Compare mortgage rates & deals

Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.

Applying for a self build mortgage

The lending criteria for self build mortgages can be stricter than other types of mortgage.

This is due to costs and timeframes often being stretched and some projects not being completed - making them a high risk to lenders.

Employment checks are usually more stringent, and you’ll need proof of either:

  • Your deposit contribution
  • Ownership of the site for your new home (which may be used as your deposit)

Our guide: Preparing for a mortgage application has some useful tips and advice on the application process.

What documentation do you need?

Before your mortgage can be approved, you’ll need to provide your lender with some documentation including:

  • Final grant of planning permission
  • Site map
  • Professional indemnity insurance and initial report from your Architect/Engineer/Surveyor
  • Building plans and costings
  • Initial valuation

The stages of the self build mortgage process

Based on your needs, there is usually flexibility over the number of ‘stage payments’ you can receive - which is when a payment is made to cover part of the build. For example, if you’ve already bought the site, you’ll skip the first stage.

There are usually between 4-6 payment stages. They may include:

  1. Buying the site
  2. Preparing the site and foundations
  3. Building the floor level
  4. Building the roof level e.g. the property’s frame or shell
  5. Finishing the property e.g. electrical wiring and plumbing, so it’s liveable
  6. Receiving the Certificate of Compliance and having the final valuation done

Each stage of the build must be certified by an official certifier before a payment is released. Payments are requested each time via your solicitor.

Self build insurance

You’ll also need to get self build insurance to protect your site and property from damage caused by things like fire, storm, flood, as well as break in and theft. If you manage labour for the build, it can also include liability against potential injuries on site.

Check that your lender doesn’t include this insurance for free before purchasing one yourself. Other types of insurance include:

  • Buildings insurance: is also compulsory with most lenders, and covers damage to the roof, walls, permanent structures, and outbuildings.
  • Mortgage protection insurance: is a condition of getting any mortgage. It protects both you and the lender throughout the mortgage term, by paying off the loan if you die.

Our guide: What insurance do you need with your mortgage? covers other types of non-compulsory insurance like income protection, serious illness cover and contents insurance..

If you’re still unsure what insurance you need, speak to a financial adviser.

Compare mortgage rates & deals

Find a range of first time buyer and home mover mortgage deals in Ireland using our comparison.

Self build mortgage FAQs

Can I claim the Government's Help to Buy (HTB) incentive?

Yes, self builds are included in the HTB scheme but you’ll need to meet other criteria too:

  • Be a first time buyer
  • Build your new property by 31 December 2024
  • Use the property as your main home for five years after building it
  • Be tax compliant

The approved valuation of the property must not be over €500,000.

You’ll also need to use a Revenue approved developer and contractor.

If you qualify, you can claim €30,000 or 10% of the property’s completion value - whichever is lower. The Help to Buy incentive will be fully reviewed in 2024.

Do I have to pay stamp duty on a self build property?

Yes. If you’ve bought a site with a linked agreement to build a property on, you must pay stamp duty on the total site cost and construction cost, excluding VAT.

Warning: If you do not keep up your repayments you may lose your home. Warning: The cost of your monthly repayments may increase. Warning: You may have to pay charges if you pay off a fixed rate loan early. Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future. Warning: The entire amount that you have borrowed will still be outstanding at the end of the interest-only period. The payment rates on this housing loan may be adjusted by the lender from time to time. (applies to variable rate loans only) Information provided and Interest rates quoted valid at 31/05/2024