(SB08) 2 Year 1.21% Discount Floored Self Build

This two-year discount mortgage comes with an interest rate of 3.99%, which includes a 1.21% discount from our Standard Variable Rate for 2 years, followed by our Standard Variable Rate for the remainder of the term, currently 5.20%. The interest rate for this mortgage is 'floored', which means that while the rate may increase, it will never fall below 3.99% during the discount period.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

(SB08) 2 Year 1.21% Discount Floored Self Build

Initial rate

3.99%

Subsequent Rate (SVR)

5.20%

Overall cost for comparison

5.20% APRC

Maximum loan to value (LTV)

80%

Incentives

None

Arrangement Fee

£1,999

Early repayment charge

Yes

Product Summary

Initial Rate

This two-year discount mortgage comes with an interest rate of 3.99%, which includes a 1.21% discount from our Standard Variable Rate for 2 years, followed by our Standard Variable Rate for the remainder of the term, currently 5.20%. The interest rate for this mortgage is 'floored', which means that while the rate may increase, it will never fall below 3.99% during the discount period.

Portability

This mortgage product is portable to a new residential mortgage on a different property when the new mortgage is taken out simultaneously with the repayment of the existing mortgage. You would need to meet our credit and affordability requirements for the new mortgage, the new property would need to be acceptable to us, and approval of a new mortgage would be subject to our prevailing Lending Policy.

Repayment Method

Capital and Interest or Interest-Only.

If paying Capital and Interest, you can choose to repay interest-only during the build. Once the project is complete, the mortgage will revert to a capital and interest basis for the remainder of the term.

Restrictions

Lending restricted to England and Wales

LTV:

75% of land value
75% of each build stage costs / interim valuation (75% LTV or Loan to Cost – whichever is lower)
80% maximum loan to final value at final stage / completion of the build.

A valuer reinspection fee is payable on completion of each build stage before that stage’s funds can be released. All funds released are in arrears of the build stage that is achieved

Loan Size

Minimum £200,000

Maximum £750,000

Fee Details

£1,999 – This can be added to the loan on completion however this will result in interest being charged on it making the overall fee greater over the term of the mortgage.

Early Repayment Charge Details

A full or partial capital repayment, which exceeds 10% of the capital balance amount in any one year during the discount period, will attract an early repayment charge of:

2% in the 1st year

2% in the 2nd year

Post full completion of the property, if the mortgage product is transferred to a mainstream residential mortgage product, (which may require payment of a Product Fee) with Vernon Building Society, then this charge will be waived, providing that the product it is transferred to will also have an initial discount or fixed rate period with early repayment charges.

Representative Example

A mortgage of £293,000 payable over 20 years based on an interest-only basis on an initial rate of 3.99% which includes a 1.21% discount from our Standard Variable Rate for 2 years followed by our Standard Variable Rate, currently 5.20% for the remaining 18 years. The first 2 years would require 24 monthly payments of £974.23 followed by 216 monthly payments of £1,269.67.

The total amount payable would be £594,084.24 made up of the loan amount plus interest (£297,630.24), Arrangement Fee (£1,999), Standard Valuation Fee (£710), Valuer Reinspection Fees - £65 each, up to 5 required (£325), Solicitor Fee (£250), Funds Transfer Fee (£15) and a Mortgage Exit Fee (£155).

The overall cost for comparison is 5.20% APRC representative.

Important Notes:

Once the product matures the interest rate will revert to our Standard Variable Rate (SVR) unless a new product is taken out. Our SVR is currently 5.20%. This is set by us and may go up or down in the future.

The Overall Cost for Comparison is given as the Annual Percentage Rate of Charge (APRC) and includes all charges incurred relating to the mortgage/product. The APRC enables you to compare the cost of different products.

The Maximum Loan to Value (LTV) is calculated by us using your current mortgage balance and our current assessed valuation of your property.

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH REPAYMENTS ON YOUR MORTGAGE