Development Mortgage Rates (UK)
Current market ranges, deposit expectations, and common fee patterns for development mortgages in one place.
Indicative figures only - lender pricing changes frequently and depends on case complexity.
Rate Overview
Typical market range for development mortgage pricing.
Typical rate range
5.0% - 7.0%
4.0% - 8.0%
Typical deposit
30% - 35%
Min 25%
Typical timeline
4-8 weeks
Application to completion
Rates are indicative, not a quote. Final pricing depends on lender criteria, LTV, rental profile, and borrower background.
What Moves Your Rate Up or Down
These are the strongest factors lenders weigh when setting pricing.
- Staged funding releases based on project progress
- Specialist lenders with development expertise
- Flexible terms for various project types
- Professional project monitoring and support
- Exit strategy flexibility
Fee Breakdown
Common charges to plan for alongside the headline rate.
Arrangement Fee
Facility setup fee
1.5% - 2.5%
of total facility
Valuation Fee
Site and development appraisal
£1,000 - £3,000
specialist surveyor
Legal Fees
Facility agreement and monitoring
£1,500 - £3,500
plus disbursements
Monitoring Fee
Build progress inspections
£300 - £800
per drawdown
Broker Fee
Development finance arrangement
0.75% - 1.5%
on completion
Rate FAQs
Quick answers to common pricing questions.
What deposit do I need for development finance?+
Development finance typically requires deposits of 30-35% of the total project cost, including land purchase and construction costs. The exact amount depends on the project type, your experience, and the lender's criteria.
What happens if the project goes over budget?+
If the project exceeds the original budget, you may need to provide additional funding or renegotiate the loan terms. Lenders will assess the reasons for overruns and may require additional security or higher interest rates.
What are the interest rates for development finance?+
Development finance rates typically range from 5-7%, higher than standard mortgages due to the increased risk. Rates may vary based on project type, your experience, and the lender's assessment of risk.
What documents do I need for development finance?+
Required documents include planning permission, detailed project plans, costings, professional team details, exit strategy, and financial projections. The exact requirements vary by lender and project complexity.
Can I get development finance for commercial projects?+
Yes, development finance is available for commercial, residential, and mixed-use projects. Commercial developments may have different criteria, rates, and terms depending on the intended use and market conditions.
How do I calculate the total project cost?+
Total project cost includes land purchase, construction costs, professional fees, contingency allowances, and financing costs. Most lenders require detailed costings from qualified professionals.