Re: can we get a morrage
First a note to the Administrators; perhaps the title of this thread should be changed to include being self-employed and building a house - it may be noticed more by people who have been in similar situations. What I have to say is more about mortgages in general.
Money Mate, the only way you're going to know for sure is by asking a few lenders or maybe going to a broker. But just so you're forewarned, here are a few things they'll take into account. Apologies if I'm telling you stuff you already know!
As you say, it's not so simple being self-employed but I think they generally want to see a few years' accounts so they can get the long-term picture.
Using your estimate of a 225k cost as the value of the house, the loan-to-value ratio (LTV) will be under 80% which should be acceptable if you'll be using it as your own home, judging by another recent thread here:
http://www.askaboutmoney.com/showthread.php?t=127901. I say "should" because I don't know if there's a different maximum when you're building a one-off house. If there is, I expect it would be lower to reflect greater uncertainty over the value.
If you're going to rent it out, the max LTV they'll lend on will be lower - not sure what.
In any case, the bank will get their own valuation done of what the house will be worth when it's built, which may be different. The valuation will include the value of the land, which will work in your favour. But if the land is being used as security for one of your business loans, that might complicate matters.
Apart from the LTV, something else that influences how much they're prepared to lend you is the net income ratio. That's the percentage of your net income that would go on your mortgage repayments plus any other loan repayments you may have (not sure whether your business loans would be taken into account here). The maximum allowable percentage will vary from one bank to another and possibly on other factors.
One thing that will affect your net income ratio is how long you're borrowing the money for. The longer the term, the lower the monthly repayment and consequently the more they will be prepared to lend you. But you have to set this against the fact that if you borrow over a longer term you will end up paying more interest in total - can be a lot more!
You mention getting a fixed rate for 5 years. This can be a good idea, if you want the security of knowing what your repayments will be. But that's the only good reason for fixing your rate. Because bear in mind that you will probably end up paying more over the 5 years than if you'd been on a variable rate, and you will restrict your freedom of action during that time. In the unlikely event that it saves you money, it will be due to luck, not good judgement - no offence, but you'd have to feel confident you know something about future interest rate movements that your bank and the money markets (who make a living predicting these things) don't.
The reason it's likely to cost more is that the rate will include an extra "premium" over and above the expected average variable rate over the 5 years. And the reason you restrict your freedom of action is that if you decide you want to switch to a variable rate during the 5 years (for example if variable rates stay lower than expected), you will probably have to pay a penalty to your lender. The same will happen if you want to pay the loan off or reduce the balance faster than the scheduled repayments during the 5 years (say you want to move house, or switch to another lender, or your uncle or aunt gives you another €20k in a year's time and you want to pay it into the mortgage). With a variable rate loan you don't normally pay a penalty for any of these things.
The interest rate premium and the penalty may sound unfair, but look at it this way: When you fix your loan, you gain additional certainty about your outgoings in future, and the bank loses the ability to change your rate in line with what it's paying to borrow money. In other words some of the risk is transferred from you to the bank. The interest rate premium is the price you pay for this (no such thing as a free lunch) and the bank's compensation for taking on the risk. As for the penalty; when you fix your loan you are making an agreement to stick to a fixed repayment schedule. Again the penalty is compensation for the bank if you break that agreement, because it will be getting less interest income than it had expected. The bank has no way (as far as I know) of breaking the agreement itself.
You will need life assurance which will pay off your mortgage if you die. The lender is entitled to insist on this. There are specially designed "mortgage protection" policies which keep the costs down by reducing the amount of cover over the life of the loan in line with the expected remaining mortgage balance.
One thing to keep in mind if you're building a house is that you can arrange to get the mortgage amount advanced in stages when it's needed, rather than having to pay interest on the whole lot from the outset.
Good luck!