Own New Rate Reducer Mortgage
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Own New Rate Reducer Mortgage
James Bull talks us through the Own New Rate Reducer scheme.
What is the Own New Rate Reducer mortgage? How does it work?
It’s a scheme for new build homes that offers lower interest rates on the mortgage for an initial period, normally two to five years.
The builder you’re buying from makes a contribution to your mortgage lender, and in exchange for that, the lender gives you a lower interest rate – and obviously lower mortgage payments.
Is the Own New Rate Reducer mortgage available for new homes only?
Yes, that’s correct. The scheme is funded by the builder, so it’s only available on new homes. In addition to that, it’s not offered by all builders. It’s only available on new homes where the developer offers that scheme.
Can a First Time Buyer get an Own New Rate Reducer mortgage? Will I need a guarantor?
Yes, it’s available to First Time Buyers – or even existing homeowners who are moving house. Most people can have it. A guarantor is not usually needed – you just apply as normal.
Who is eligible for the Own New Rate Reducer mortgage?
It’s available to anybody buying a new build house from a builder that offers the scheme. It’s open to First Time Buyers and people moving house.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
How much of a rate reduction can I expect with the Own New Rate Reducer mortgage? How does it compare to a traditional mortgage?
Obviously, mortgage lenders vary their interest rates and products all the time, and it does depend on what you’re eligible for. There’s not really an exact answer to this question.
But based on today’s rates as we speak in July 2025, if an average mortgage rate is around the 4% to 4.5% mark, with Own New we’ve got products starting at 1%. So you might be looking at a 3% discount, which obviously translates into much lower payments on your mortgage.
How long will the rate reduction apply for? Is it permanent or temporary?
It’s just a temporary rate reduction, typically for two to five years. It depends on the terms the builder and the mortgage provider offer.
Is there a minimum or maximum loan amount eligible for the Own New Rate Reducer mortgage?
Yes, and this varies between lenders. We’ll obviously give advice on the most appropriate mortgage after we’ve got details of a particular client’s requirements and circumstances.
Can I remortgage to an Own New Rate Reducer mortgage?
It’s only available to people purchasing a new build property from a participating builder, so it’s not available on a remortgage. That’s because it’s funded by the builder.
How long does it take to get approved for the Own New Rate Reducer scheme?
Once you’ve agreed the terms with the builder around how much deposit they’re going to give back, it’s typically just the same as applying for a normal mortgage.
The usual timescales apply to get the mortgage approved. It varies between lenders, but two to three weeks is the average.
How do I apply for an Own New Rate Reducer mortgage?
The scheme itself is only available through certain mortgage brokers. Not every single adviser can offer this scheme. I’m happy to say we are approved brokers at JB Mortgages, so we can arrange this. If you’re interested in applying for this, just get in touch with us and we’ll take it from there.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
If you’re a first-time homebuyer looking for a mortgage, our team of mortgage of mortgage advisors is here to help. We can assist you in finding the perfect mortgage for your first house.
We have put together the below first time buyer guide, which can help answer frequently asked questions:
What is a ‘First Time Buyer’?
You are a first time buyers if you are looking to purchase your first property and have never owned a property before.
You do not qualify for a first time buyer mortgage if you have previously owned a property, or if you have inherited property from a family member. Similarly, if you own a house or flat but your partner does not, and you want to purchase somewhere together, you will not be eligible for first time buyer mortgage schemes.
How much deposit will I need?
You will need a minimum deposit of 5% of the purchase price, which would mean you would need a 95% loan to value (LTV) mortgage. As a 5% deposit is generally the minimum deposit needed, the amount of mortgage products available on the market will be limited.
The larger deposit you have, the wider your choice of mortgage product will be. You’ll also benefit from lower interest rates as mortgage lenders consider first time buyers with bigger deposits as lower risk than those with only a small deposit, so if you proceed with a 10%, 15% or 20% deposit, you will have access to more mortgages on cheaper interest rates.
Mortgage lenders can accept your deposit from personal savings or via a gift deposit from a family member or friend.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
How much can I borrow?
The maximum mortgage amount you can borrow will vary from mortgage lender to mortgage lender.
Most mortgage lenders will allow you to borrow up to 4.5 x your annual income – for example if you and your partner earn £25,000 each (£50,000 in total), you might be able to borrow £225,000 subject to meeting the mortgage lenders affordability criteria.
Mortgage lenders will need to know about all your outgoings, such as:
- Credit card balances
- Unsecured loan balances & monthly payments
- Car finance balances & monthly payments
- Student loan payments
- Childcare costs
- School fees
Some banks or building societies will allow you to borrow up to 6 x your annual income. These higher income multiples would mainly apply to first time buyers with larger incomes and larger deposits.
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