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Using a Site as a Deposit for Mortgage

  • 13-04-2022 10:54am
    Registered Users Posts: 1,548 ✭✭✭

    Hi guys,

    We are buying a site, subject to planning permission being granted (application processing), with the hope of self-building thereafter. Has anyone used a site they have bought as a deposit for their mortgage? What are the things to look out for here if so?

    Buying the site and associated fees will see most, but not all, of our savings gone.

    Also, as an aside, can we use the mortgage to pay for some of the additional fees such as local contribution fees, architect fees, solicitor fees, water, waste and ESB connection fees?

    All help appreciated.


  • Administrators Posts: 52,195 Admin ✭✭✭✭✭awec

    It depends on the value of the site relative to the cost of the build. You will need to show additional savings, if you just have a site and nothing in the bank you won't get approved. Banks will need to see you have the cash to cover all the other costs.

    I believe ESB connection / water connection can be included in your mortgage costings when you apply.

    The other things must come out of your own pocket.

  • Registered Users Posts: 1,548 ✭✭✭Leftwaffe

    The value of the site is 32.5k and the cost of the build to builders finish is approx. 260/270k allowing for a €1500p/sqm. Its a 180sqm house. I understand the cost will likely go above the that due to rising prices of materials, etc.

    By additional savings, how much are we talking here? and what other costs do you mean?

    Thanks for the reply.

  • Administrators Posts: 52,195 Admin ✭✭✭✭✭awec

    The questions on costs etc, I'd suggest starting a thread in Construction and Planning as that's where the experts and people with past experience are and they're best placed to answer.

  • Registered Users Posts: 127 ✭✭SodiumCooled

    Hi Leftwaffe, I can try to answer your question based on my own experience but just to caveat my response by saying that I don't know how different the procedure would be if you were engaging a building contractor as I can only speak from a direct labour perspective.

    The bank will consider the site value as part of your deposit however (in our case) we still need pretty decent savings also as the bank require that we have foundations completed prior to our first draw down. Therefore we need to cover all the costs upfront required to get the foundations in place i.e. Labour costs for the work, stone fill, steel, concrete, any blocks for used, and many smaller costs that add up. How much this is will vary a lot depending on many factors like how much stone fill you need, can you use a strip foundation or is a raft required etc. It could be anything from 25 to 50k+ very hard to say as its very site specific.

    As for the other costs a portion of the architect and/or engineer fees and council contribution fees are likely to be needed up front. I know we have had to pay the architect for the planning phase and a portion of the the construction phase already. The council fees (which vary significantly depending on what part of the country you life in - approx 5k for us in the south East in a similar size house to your own) are due now in our case but we will be drawing down in a few weeks so could probably get away with with holding off if we needed too but we have the savings so don't need to.

    If going the contractor route however things may be different in that they may front the costs up to your first drawdown however I would be very surprised if the bank were not expecting you to have some savings also. Hope that helps a little.

    Also I would second awec and say to have a read of the Construction and planning pages - I came across these pages recently myself on the advice of someone else and there is lots of helpful advice there and posters willing to help.