Porting 5y Fix Mortgage to Self Build Mortgage

stu887

Hi MSE'ers, some advice needed.

Bit of background first. My in-laws own a farm and an architect and planning advisor has suggested that they would likely get permission to convert an old stable block into a new house, which my wife and I are considering doing. Although the intention would be to eventually purchase the land, as it's my wife's parents, they have said they would be willing to transfer ownership of the land to us for a small deposit, meaning we wouldn't need a large up-front sum to cover the cost of buying the land. 

Here's the rub. We recently (2 weeks ago) remortgaged on our existing home, opting for a 5 year fix with Nationwide (at the time, the option of building hadn't even come up in conversation). If we are successful in getting planning permission to convert the old stables, we would need to sell our house in order to fund the build project. However, as we are so early into our 5y mortgage, if we repay the whole lot and apply for a new self-build mortgage, we face a substantial early repayment fee from Nationwide. 

Does anyone know if it is possible to port a standard mortgage to a self build mortgage and what options we might have? 

[Deleted User]

It is possible but you need a lender who does self build mortgages to port within.  Nationwide dont offer them so you are hitting a brick wall at the first step.    

Can you afford to run 2 mortgages and stay in the main home whilst the build is ongoing? And then maybe rent out your main home until the 5 year ERC expires? 

stu887

Thanks - I hadn't realised Nationwide didn't offer self build mortgages!

We could afford to get a second mortgage to fund about 1/2 of the build costs. It could be an option to see us through a few months/maybe a year or so on the existing Nationwide mortgage. At least that way it could potentially take some of the sting out of the ERC. I'll look into that as an option.