All about Own New

There are many homebuying schemes out there designed to help you buy a new build home. While some lenders offer their own incentive schemes, Own New’s innovative Rate Reducer allows lenders and developers to work together to offer you a new build mortgage at a competitive rate. 

Here’s everything you need to know about buying a new build with Own New:

What is Own New Rate Reducer? 

Own New Rate Reducer is a scheme designed to make it easier and more affordable to buy a new build. By partnering with lenders and homebuilders, Own New makes it possible for you to buy a new build at reduced mortgage rates for the initial term of your mortgage.

How does Rate Reducer work? 

Own New works with homebuilders and lenders to reduce interest rates, resulting in lower monthly payments. This reduced rate will be fixed for a specific term, usually 2-5 years.

Once you’re ready to buy, you’ll need to find a developer that’s working with Own New, as not all of them do. You’ll be able to spot on the developer’s website whether they’re participating in the scheme, and from there, you can browse their available properties. 

When you’ve found one you like, you’ll apply for your mortgage. A mortgage adviser will be able to help you work out your eligibility and help you secure the right rate through the scheme. 

Once approved, you’ll benefit from your reduced rates for your fixed term and then move onto a new rate afterwards.

Remember, if you don’t remortgage before the end of your fixed term, you’ll fall onto your lender’s standard variable rate (SVR), which will be significantly higher than any fixed term you can get with them or someone else. 

A mortgage adviser will have the expertise to help you secure a new rate that works for you.

What are the benefits of Own New Rate Reducer?

You’ll benefit the most from lower mortgage rates, since your interest rate will be significantly lower than a traditional mortgage for a fixed period of time. Because of this, you’ll save money on your monthly mortgage payments for that initial term. You can save this extra cash and use it as you’d like, whether that’s putting it aside to pay off a part of your mortgage when your fixed term ends, helping you with living expenses, or putting it towards a renovation. The choice is yours! 

Keep in mind that once the initial period is over, you’ll likely move onto a slightly higher rate, so make sure you can afford the increase in mortgage payments at a later stage.

Do I qualify for Rate Reducer?

While the Own New Rate Reducer scheme is open to first time buyers and existing homeowners, specific eligibility criteria does apply. You’ll need to have the following: 

• A minimum deposit (this will vary by developer and lender)
• Approval to use the scheme from a mortgage adviser
• A lender that’s participating in the scheme (some of the UK’s biggest lenders are participating in this)
• The lowest rates on Rate Reducer require larger deposits (but there are options available across a variety of price points)

A mortgage adviser will be able to tell you which lenders are participating in the Rate Reducer scheme and whether or not they can approve you for the incentive.

Are there alternatives to Own New's Rate Reducer?

There are a variety of buying schemes available if you want to buy a new build, some of which are government funded and others that are led by developers specifically. 

Many house builders offer their own incentives to help people get on the property ladder. These can include, but are not limited to: 

• Help with your deposit
• Part exchange deals
• Shared equity schemes
• Paying for Stamp Duty
• Covering legal fees
• Providing upgrades like flooring and appliances 
• Offers of cash or gift cards for furnishings

Some incentives may even complement more formal schemes, such as paying a few months’ rent on a Shared Ownership property. It’s worth asking what’s available and communicating with the developer to see what they can do.

Check out the full list of alternative incentives here:

Getting mortgage advice for a new build

Own New’s Rate Reducer offers a valuable opportunity for homebuyers looking to purchase a new build at an affordable rate. By providing reduced mortgage rates for the initial term, the scheme can significantly lower monthly payments and make getting on the property ladder (or moving up it) more accessible. 

While there are advantages to using Rate Reducer, it’s important to consider the deposit requirements, potential rate increases after the initial fixed term, and the availability of homes with participating developers. 

To make an informed decision and find a new build using Rate Reducer, speak to a mortgage adviser. They can help you work out your eligibility and affordability and help explain the details of the Own New Rate Reducer scheme. They can also help you explore all your options, just in case there’s something that aligns better with your individual needs and circumstances. 

Note: Not all lenders use the Own New scheme, but an adviser will know which lenders are participating.