Get a Second Opinion - Don't Use Your Builders Preferred Broker!
Get access to industry leading rates in minutes, along with receiving trusted, independent, award winning advice.
Access to Best Mortgage Rates
Some mortgage rates and products are only accessible through a broker.
Search & Compare UK Market
Search 96+ lenders and 12,000+ rates in minutes, finding what's right for you.
Free, No Obligation Advice
There is no cost for advice, searching, comparing rates or a mortgage in principle.
Guide to Own New Rate Reducer Scheme
Getting a good mortgage rate is often a struggle; what if you could gain access to amazingly low mortgage rates for your new home? That’s where the Own New Rate Reducer Scheme comes in.
This new scheme aims to get you into a new home with a cut-price mortgage rate for your first term; this makes your mortgage more manageable and enables you to get on the property ladder without being bogged down by a heavy financial burden for those all-important first few years.
Get complete clarity on your options in minutes:
Specialist We are rate reducer experts 96+ Lenders available to our advisersWhat is the Own New Rate Reducer scheme?
Launched in February of 2024, the scheme was created by property finance company Own New and is aimed at making homeownership easier and cheaper than ever.
The catch (if you want to call it that) is that the scheme is only available for new build housing developments. Own New work with well-known and trusted lenders and more than a whopping 60 home builders to give buyers access to the best mortgage rates you’re ever likely to find.
The Rate Reducer scheme uses developer incentives to substantially reduce the amount you pay on your mortgage during the first term. The rates are sometimes below 1%, practically unheard of in recent times, and you could get a new home with as little as 5% deposit.
So, how does the Own New Rate Reducer scheme work?
Since new build housing developments are often carried out in order to help people get into their own home, there are many incentives offered to developers enabling them to give buyers a helping hand. Rate Reducer works by using a contribution made by the developer to help lower the price of your mortgage rate over the first few years. Basically, it works like this: A bit of an oversimplification but we think you’ll agree, it illustrates just how easy and helpful this new scheme is. Your interest rate is lowered for 2 to 5 years depending on the length you choose for your initial term. Let’s look at how payments work in more depth, to give you a better idea of the financial commitment you are expected to make with the scheme. Get complete clarity on your options in minutes:Own New Rate Reducer scheme work explained
How do payments work with the scheme?
The rates you get, as with any lender, will depend on the amount of deposit you have been able to save.
If, for instance, you have a deposit of 40%+ you could be looking at an initial rate of an incredible 0.35%! This is based on a 2-year fixed term with Virgin Money and also requires a 5% builders incentive. Obviously this is the very best case scenario, you simply would not be able to find rates as good as that anywhere else with a regular mortgage.
A smaller deposit offers you less extreme savings but by using the Rate Reducer scheme, they will still be far better rates than you would find on the open market.
As an illustrative example, say you are going to take out a £200,000 mortgage and have a 25% deposit, using Virgin Money as our lender once again you would get a Rate Reducer scheme rate of 1.14%, which is still an incredible saving.
Obviously, these are all examples and rates will vary depending on the lender and your deposit amount.
To put this into further perspective, the average mortgage rate for a similar deposit and property value is normally 3-4% above this rate.
Who is eligible for the Own New Rate Reducer scheme?
The Own New Rate Reducer scheme is designed to be open to as many people as possible.
You will be able to take advantage of the rate reducer scheme whether you are a:
- First time buyer
- Previous home owner
- Home mover
Which covers pretty much everyone! So if you’re looking for a new build house or are waiting for the right opportunity to come along, consider the Own New Rate Reducer scheme as the next step in finding your affordable home.
The pros and cons of Own New Rate Reducer scheme?
Pros:
Lower monthly repayments – because of the way the scheme works, even with a small deposit you will have lower monthly payments than if you were to get your mortgage through regular channels.
Pay off more of the borrowed capital – paying lower interest rates on your mortgage for the first 2 to 5 years, means you’ll end up paying off more of the actual capital of the loan than if you had a higher interest rate.
Cons:
Temper your expectations – whatever your deposit amount and whichever lender you opt to go with, you will make a saving by using the Rate Reducer scheme, however, you may find that the rates you are offered are not as incredible as below 1%.
Higher rates after the initial term – opting for the Rate Reducer scheme offers a fantastic short-term benefit but after your initial term has ended you will go onto a much higher interest rate in line with the regular interest rates offered by mortgage lenders.
Depreciation of new build houses – new build houses and flats depreciate in value fairly quickly. Even in property markets where house prices are rising, you may not get your money back if you decide to sell within the first few years of home ownership.
You Don't Have to Use the Builders Preferred Broker
Using an independent broker to source your "Own New" mortgage can literally save you 1,000's
Find Out Now
Are there any alternatives to Own New Rate Reducer scheme?
Own New Rate Reducer isn’t the only scheme you can take advantage of when buying a new property.
- The mortgage guarantee scheme helps you if you have a 5% deposit and is also called the 95% mortgage scheme. This scheme runs until 2025 and isn’t limited to any type of property unlike the Rate Reducer Scheme.
- Shared ownership is always an interesting choice to consider but is quite complex and we recommend you do a large amount of research on the subject to see if it’s right for you.
- 100% mortgages are designed to help first time buyers and people who haven’t owned property in the last 3 years. You take a no deposit mortgage, provided you have a good track record of paying rent. This sounds great but you also risk falling into negative equity if the price of your property falls below the total amount of the mortgage you took out when you bought the house.
The best thing to do is discuss all these options, as well as the Own New Rate Reducer scheme with your Mortgage Broker.
We are experts at getting the right mortgage product with the best rate for the right property; by working with us we’ll be able to discover all of the options available to you and which will be most beneficial.