Getting a self-build mortgage in Ireland

A self-build mortgage pays for your house in stages as construction progresses. Before you start, agree when each payment will arrive and how much of the early work you must fund yourself.

How does a self-build mortgage work?

An ordinary mortgage buys something that already exists. The bank values the house, you pay the seller, and the loan is drawn in one go. A self-build mortgage lends against a house that is only a set of drawings, planning permission and a budget. The lender takes security over the property, including the site, while the house is unfinished. Expect three main requirements, with the timing and evidence set by your lender:

• Full planning permission. Ask when the final grant must be supplied; some lenders require it with the formal application.
• Costings and a valuation. You need to show that the house can be completed within your budget and supports the proposed loan.
• Certified stage payments. Your professional confirms progress before the lender releases the next instalment, subject to its conditions.

Keep your permission, cost plan and mortgage conditions together. Changes to the design or construction programme can affect the budget and the timing of payments, so discuss them with your professional and lender before committing to extra work.

Once you know what you can borrow, compare written mortgage offers on the same budget and timetable. Work out site-purchase cash before committing to land, and use the construction-interest examples for monthly household payments.

The order things happen in

Use this as a funding checklist. Ask your lender to confirm its sequence; an early affordability discussion and a formal application are different steps.

1. Secure the site and check it. Before you spend on design, make sure the site is suitable: access, services, wastewater, ground, flood risk and planning policy. Lenders will ask a solicitor to confirm title.
2. Discuss affordability early. Ask what assessment is available before planning and which documents you need for approval in principle (AIP). An AIP may last six months, but it is not a loan offer. Full approvals are also time-limited, typically to six to 12 months. If yours lapses before completion, you may need to reapply and be reassessed.
3. Get planning permission. Confirm when your lender needs the final grant. The Local Authority Home Loan requires full permission, and the First Home Scheme requires it before you sign its contract.
4. Pull together costings. Get a fixed-price contract quotation or detailed costs for each element of the build.
5. Apply and have the site and plans valued. The lender’s panel valuer and your professional (architect, engineer or building surveyor) each report.
6. Receive the letter of offer. Read the conditions, the time limit on the offer, and the drawdown schedule.
7. Build, and draw down in stages. See how staged drawdown works.
8. Complete. The final stage is released against completion certification and, normally, a Building Energy Rating (BER) certificate.

You may incur site investigation, design and planning costs before a formal mortgage offer exists. Plan your cash for the period before the loan exists. The overall sequence of a self-build shows where that spending falls.

How much you can borrow

The Central Bank’s mortgage measures, in force in their current form since 1 January 2023 (they were first introduced in 2015), set two limits:

• Loan-to-income (LTI): up to 4 times gross income for first-time buyers, and 3.5 times for second and subsequent buyers. For example, a first-time buyer couple with a combined income of €100,000 could borrow up to €400,000. A second or subsequent buyer with the same income could borrow up to €350,000.
• Loan-to-value (LTV): a minimum 10% deposit for both first-time and second or subsequent buyers. Buy-to-let borrowers need 30%.

There is also an allowance. Lenders may exceed the limits on up to 15% of their first-time buyer lending and 15% of their second and subsequent buyer lending, and 10% of buy-to-let lending. That means some borrowers are lent more, but it is a quota the lender chooses how to spend. It is not an entitlement, so do not plan around it.

Ask your lender to confirm whether you qualify as a first-time buyer and how it applies the mortgage measures to your self-build. A lender will also run its own affordability test on top of the limits. In practice that means looking at your income, your outgoings and your credit record, so the figure you can actually borrow may be lower than the maximum.

The deposit works differently

On an ordinary purchase, you pay the deposit at closing. On a self-build, you may need to spend your contribution on the first construction stage before the lender releases any money.

For example, one available mortgage requires a contribution of around 10% of the build cost and lends up to 90% of the property value. For that calculation, the value is usually the lower of site plus build cost and the finished valuation. Ask your lender to confirm both its calculation and the cash you need before the first drawdown; owning a valuable site does not pay a contractor’s invoice.

That “lower of” rule is the one that catches people. If the valuer thinks the finished house will be worth less than you plan to spend, the loan is based on the smaller figure and you fund the difference. A very individual design, a remote location or an expensive specification can all produce a valuation below cost.

If you already own the site, lenders may take it into account as part of your contribution. Ask each lender how it values land you hold, and whether it counts towards the deposit. Under the First Home Scheme, a site received from your parents may count towards the 10% deposit if you meet the other criteria.

What you will need to apply

Prepare the following documents, then check the list against your lender’s requirements:

• Photo ID and a recent utility bill.
• Payslips, or two years of audited accounts if self-employed.
• Six months of current account statements, and savings statements showing regular saving if the accounts are held elsewhere.
• A fixed-price contract quotation or detailed costings for each element of the build.
• Full planning permission.
• An initial valuation from a valuer on the lender’s panel.
• An initial report from your architect, engineer or building surveyor, on the lender’s form.
• A provisional BER certificate.

Your lender will also assess your day-to-day finances. Alongside identification and proof of address, it may ask for your Revenue employment detail summary, a salary certificate and six months of bank and card statements. It checks your credit history through the Central Credit Register.

Regular savings and bills paid on time help demonstrate that you can manage repayments. Overdrafts, existing loans, credit card balances and childcare costs affect affordability. Use the lender’s checklist and submit the documents together, early enough to resolve any queries before you need the money.

Your costings matter more than usual, because the lender checks them against the valuation. Build in a contingency before you submit them, and ask your professional to confirm the figures are realistic. A budget with no allowance for surprises is a warning sign to a lender, and a more important one to you.

Contract build or direct labour

How you intend to build changes the mortgage. A contract build means a main contractor on a fixed-price contract. Direct labour, or project managing, means you hire and coordinate the trades yourself. See project manage or hire a main contractor for the practical trade-offs.

Your build route can change how much you can borrow. For the Local Authority Home Loan, the maximum loan-to-value percentages are:

• Pre-owned site with planning, fixed-price contract: up to 95% of build cost and professional fees.
• Pre-owned site with planning, direct labour: up to 85% of build cost and professional fees.
• Site to purchase with planning, fixed-price contract: up to 90% of site cost, build cost and professional fees.
• Site to purchase with planning, direct labour: up to 80% of site cost, build cost and professional fees.

Direct labour is only available there at the local authority’s discretion, and it requires a self-build insurance certificate, a supervising architect, engineer or chartered building surveyor, and supervisor professional indemnity cover of at least €1 million per claim without an aggregate cap. Commercial lenders set their own rules, but you should expect questions about who is supervising the work and what insurance sits behind them. See insurance when you project manage.

Interest-only during the build

Some lenders offer interest-only repayments during the build. One available option lasts for the first nine months, subject to approval, and carries these conditions:

• You still owe the full amount at the end of the period.
• Repayments then rise so the loan clears within the original term, and the total interest is higher.
• Life cover of 103% of the loan is required.

Interest on a staged loan generally relates to the amount advanced. That does not mean every staged mortgage has interest-only repayments: principal repayments depend on your agreement. Ask the lender how repayments are calculated while the build is under way, and what happens if the build runs late. Extending the loan term can lower monthly repayments but adds interest overall. Use the Competition and Consumer Protection Commission (CCPC) mortgage calculator to compare the total cost as well as the monthly payment.

How do you compare mortgage rates?

Compare the rate during construction with the rate once the house is complete. Variable rates and fixed terms of up to 10 years are available, but the choices depend on the lender and product. Ask for the build-period rate in writing; do not assume it is separately priced or guaranteed by an advertised rate.

The finished home’s BER can affect the mortgage options and rates available to you, so settle the energy design early. Use the CCPC’s free mortgage comparison tool before applying. If you expect to switch later, check the switching costs and conditions as well.

Schemes that sit alongside the mortgage

Three State-backed supports are relevant. Each has its own rules, and they do not all combine.

	Help to Buy	First Home Scheme	Local Authority Home Loan
What it is	Refund of income tax and DIRT	Shared-equity stake in your home	State-backed mortgage
Maximum help	Up to €35,000, or 10% of the approved valuation if lower	Up to 30% of the build cost, or 20% with Help to Buy	Check the current income and value ceilings
When you get it	After first mortgage drawdown, paid into your mortgage account	Drawn in one transaction once 50% of funded works are certified	Check with your local authority
Combine with	First Home Scheme	Help to Buy only	Not the First Home Scheme

Help to Buy

Help to Buy refunds Irish income tax and Deposit Interest Retention Tax (DIRT) paid in the four tax years before you apply. The further enhanced relief has a maximum of €35,000 for qualifying applications and triggering events from 7 October 2026 to 31 December 2029. The refund is the lowest of that maximum, 10% of the approved valuation for a self-build, and the tax and DIRT you paid. For a self-build, the trigger is your first mortgage drawdown, and Revenue pays the refund into an account you hold with your mortgage provider. See our guide to Help to Buy for self-builders.

The claim needs first-drawdown evidence and solicitor verification. Confirm when the refund will be available before promising a contractor payment; it is not cash available before the first drawdown.

First Home Scheme

The First Home Scheme (FHS) is a shared-equity arrangement. It has a self-build product for people building on a site they own or are buying, anywhere in the Republic. Before applying, check these conditions:

• It can fund up to 30% of the purchase price or build cost, or up to 20% if you also use Help to Buy.
• It bridges the gap between your 10% deposit plus mortgage and the cost. It does not contribute to the deposit.
• It cannot be used to buy the site, and demolition costs are not covered.
• The equity share is calculated on the build cost only, not the site value. At redemption, the site’s share of the total value is deducted first, and the FHS percentage is applied to the remainder.
• You apply with a mortgage approval in principle and an estimated build cost. Before signing the FHS contract you submit a certified build cost and a lender valuation, and the projected completed value must be at least the build cost plus the site value.
• You have 12 months from signing to draw down, and 2 years from drawdown to complete the build. The full facility is drawn in a single transaction, after a certified report shows at least 50% of FHS-funded works are complete.
• It cannot be increased to cover overruns. A change in your mortgage drawdown changes the equity percentages.
• It can be combined with Help to Buy, but not with the Affordable Home Purchase Scheme or the Local Authority Home Loan.

For example, take a €300,000 build on a €100,000 site, with €30,000 of FHS equity (10% of the build cost). The site’s share is 25%. If the house and site are later valued at €450,000, €112,500 is deducted for the site, leaving €337,500, and 10% of that, €33,750, is the redemption payment. Take the time to understand this before signing, because it is an ongoing share in your home.

Local Authority Home Loan

The Local Authority Home Loan is for first-time buyers and fresh start applicants, and covers self-builds. Check its current income and property-value ceilings as well as the self-build percentages above; a maximum percentage is not a loan approval.

To qualify for its self-build loan, you must meet these conditions:

• Only new construction qualifies. A property already part-built when you apply is ineligible.
• Full planning permission is required, certified by the construction supervisor, and you cannot opt out of Building Control statutory certification.
• Your solicitor must confirm full unencumbered title to the site, with no liens or charges. There must be direct access to a public road, either over land you own or a registered right of way.
• If the property is not on mains services, all services must be within the site boundary.
• A quantity surveyor’s bill of quantities must show full costings.
• Valuation happens after planning and before the letter of offer, and it is based on the completed property.
• A compliance certificate for planning and building regulations is required before drawdown, and a completion certificate and BER certificate are required at the end.

For a contract build, the loan requires a fixed-price contract, latent defects insurance and registration on the Building Control Management System (BCMS). Builder or engineer certificates do not substitute for latent defects cover under this scheme. See structural defects cover.

Costs beyond the deposit

Allow for these costs as well as your contribution to the build:

• Legal fees: your solicitor, including searches and registering the deeds.
• Stamp duty: ask your solicitor to calculate the tax for your site purchase and contractual arrangements. A residential house-purchase rate is not a safe assumption for a separate site transaction.
• Valuation fees. On the Local Authority Home Loan, valuation and survey fees are paid by the borrower directly to the valuer.
• Mortgage protection and home insurance. Confirm the lender’s required policies and any mortgage-protection exception; you can generally buy cover elsewhere.

On a self-build you should add professional fees (architect, engineer, quantity surveyor), connection charges, planning fees and the cost of regular certification. The FHS price ceiling, for example, includes connection fees, local authority fees and professional fees, so it is a reminder that these belong in the budget.

Insurance and legal steps

Agree the required building insurance and mortgage protection with your lender before drawdown. Confirm the cover, start dates and any mortgage-protection exception that applies to you. Use suitable construction cover while building. See what lenders require and contract works and public liability. Appoint a solicitor early. They handle the contracts, drawdowns, stamp duty and registration, and the title checks that every lender asks for. For both Help to Buy and the First Home Scheme your solicitor plays a formal role.

Common problems and how to avoid them

• Starting work before the money is in place. The First Home Scheme requires construction not to have started at application or contract signing; the Local Authority Home Loan excludes projects already commenced at application. Do not break ground, or even sign a build contract, until you have checked each scheme’s rules.
• Valuation below cost. Get an early view from your professional on what the finished house is likely to be worth, and be ready to cover the shortfall or reduce the specification.
• An offer that expires. Offers are time-limited. If planning conditions, a delay in the build, or a wait for Revenue approvals run past the offer date, you may have to reapply and be reassessed. Ask for the expiry date and how to request an extension.
• Underestimating overruns. Neither lender money nor the FHS facility automatically grows with the cost. Overruns come from your own pocket or from contingency, so build one in.
• Poor title. Rights of way, wayleaves, liens and boundary problems can stop a lender in its tracks. Have your solicitor review the title before you buy the site.
• Assuming all lenders behave alike. Some lenders do not offer self-build mortgages at all. Document requirements and processing times differ. Compare early.

If something goes wrong

Start with the lender’s complaints process. If you are not satisfied with its final response, you can bring a complaint to the Financial Services and Pensions Ombudsman (FSPO). It asks that you give your provider the chance to resolve the problem first, then submit the complaint form with a copy of the final response letter. The service is free, and the FSPO never asks for payment to progress a complaint. If you fall behind on payments, speak to your lender early, and see the CCPC’s guidance on mortgage arrears.

Questions for each lender

1. Do you need full planning permission before approval?
2. How is land I already own valued, and does it count as deposit?
3. Is there an interest-only period, how long, and what does it cost overall?
4. What is released at each stage, and how fast after certification?
5. What are the time limits on the offer, and can they be extended?
6. What is your maximum loan-to-value for direct labour compared with a fixed-price contract?
7. Which professional certificates do you need at each stage, and on whose forms?
8. How does your offer interact with Help to Buy and the First Home Scheme?
9. What happens if the valuation comes in below the build cost?
10. Are valuation and inspection fees charged each time, or once?

Take notes of the answers and keep them with your offer. If a lender’s answer is vague, ask for it in writing. A broker who is authorised by the Central Bank can compare lenders for you, and should be able to explain any fee in their terms of business.

Building with savings instead of a lender? See building a house without a mortgage.

Not sure of the order of the first steps? See where to start a self-build.

Buying someone else’s part-built house? Use the unfinished-house purchase checks before committing to the sale.