Comparison of Advance and Arrears Stage Payment Mortgages

The Accelerator advance stage payment mortgage provides lending of up to 95% of the cost of property to be renovated or converted and up to 95% of the cost of the building works with stage payments on the works made at the start of each stage rather than at the end. An arrears renovation or conversion mortgage will typically lend 85% of the property cost and 85% of the works cost with stage payments made after each stage is completed.

The chart below shows the effect on the funding for a project of the advance and the arrears stage payments.  Although both products are lending the same amount by the end of the project, the timing of the stage payments has a major effect on cashflow during the project.  If you choose an arrears stage payment mortgage you will need access to more cash during the build than if you use the advance scheme.

Which one is right for you?

How do you decide which is the right type of mortgage for you?  Our advisers will recommend products once they fully understand your project and your circumstances but if you answer yes to the following questions then an advance stage payments product may be more suitable:

• Would you like to buy and renovate or convert a run down property but don’t have access to enough cash to pay the deposit on the property and the cost of the early building works?
• Would you like to stay in your existing home while you create your new one?
• Do you need to borrow money to a large percentage of the cost of the property?
• Do you want to have more control of the cashflow during your project?

Call one of our advisers now on 0345 223 4888 to discuss your requirements or request a call back online.
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