Custom, kit and eco build finance

A custom build mortgage funds a home that a developer or enabler builds to the buyer's design, often on a serviced plot within a larger site. The buyer has more say over the design than with a standard new build, and less day-to-day involvement than with a self build, with funds usually released in stages.

Custom build projects can be faster and more predictable than a self build, because the enabler manages planning, services and much of the construction. Lenders still need a costed contract and a warranty for the finished home.

Councils must grant enough planning permissions to meet demand on their self build and custom housebuilding registers, which has encouraged serviced plot schemes (GOV.UK Right to Build guidance, accessed 20 Oct 2026).

Kit homes and timber frame homes can be funded with a self build mortgage, and most lenders accept them where the supplier is established and the home carries a structural warranty. The main difference is cash flow, because kit suppliers often need large payments before delivery, before the lender's usual stage release.

Advance stage self build mortgages release money before each stage rather than after, which suits kit homes with large early payments. Arrears products pay out after a stage is complete, so the borrower funds each stage first.

Structural insulated panels and other modern methods of construction are accepted by many lenders with a recognised warranty or certification. How stage releases work in detail is explained in the guide to how self build mortgages work.

Eco build and passivhaus homes can be funded with standard self build mortgages, and some lenders offer green products with lower rates or higher borrowing for homes with strong energy ratings. Lenders still value the home on comparable sales, so extra spending on energy features may not all show in the valuation.

Air source heat pumps, solar panels and high insulation levels are widely accepted. Unusual designs, earth-sheltered homes and off-grid plots narrow the choice of lenders and can need a specialist valuer.

An energy performance certificate is needed on completion, and the finished rating can matter when the self build mortgage is replaced with a standard one. The lenders active in this area are compared on the self build mortgage lenders page.