Since the majority of people looking to purchase a plot of land for the first time are doing it because they want to build their own homes, this type of land mortgage is the most common.
A self-build mortgage, as the name suggests, allows you to purchase a plot of land and finance the cost of constructing a house on it where you yourself will live.
This isn't possible via a standard residential mortgage because it's meant to help you own a house that already exists.
Standard mortgages will provide you with the needed money in one go because the lender secures the loan against the house, which exceeds the loan's worth.
This sort of security is unattainable in self-build mortgages because there's only land without a house. Unless you pay the lender, they'll have a hard time getting their money back.
As such, lenders in self-build mortgages will provide you with the needed money over multiple instalments to cover different stages of construction.
These stages are typically set as follows: