Self build mortgage with low termination fee?

[Andehh]

We are carrying out a knock down & rebuild for our project, and own the land outright & have 50% of the funds to knockdown/build...the issue we have is we are £250k short of completing it...basically run out of cash 4 months before the end. 

 

Our main option looks to be self build mortgage at 4.5% for the 250k...to cover the 4 month shortfall...but then we pay the higher rates for 2 years.  This is opposed to a standard mortgage @ completion which would be at 0.95%. It's a stiff pill to swallow for just 4 months coverage.

 

I am wondering if its worth taking out a self build mortgage, use it for 4 months, then on completion remortgage at 0.95% (ish), pay off the self build mortgage & continue onwards at 0.95%.

 

What pitfalls am I missing with the above? Does anyone know of any firms with a low early repayment fee? Can anyone suggest any other ways around this?  Anyone have £250k free for 4 months!? ? ? 

 

 

Edited September 30, 2021 by Andehh

[Alfie]

Could you try a bridging loan?

 

You would have >50% equity (50% of the building cost + land value) so that shouldn't be an issue. You could then repay the loan in full once you secure a residential mortgage.