What Is the Own New Rate Scheme?
Own New Rate is a developer-funded mortgage subsidy scheme designed specifically for buyers of new build homes in England, Scotland, and Wales. Unlike government-backed programmes such as the now-closed Help to Buy equity loan, Own New Rate is a private-sector initiative coordinated between housebuilders and participating mortgage lenders. The scheme was developed in response to the challenging interest rate environment that emerged from 2022 onwards, when the Bank of England's base rate rose sharply from its historic lows, pushing standard mortgage rates well above 4% and, at times, above 6%.
At its core, Own New Rate allows a participating developer to use a portion of their profit margin to "buy down" your mortgage interest rate for a fixed introductory period — typically two to five years. This means that instead of paying the prevailing market rate on your mortgage, you benefit from a significantly reduced rate, sometimes as much as 1.5% to 3% lower than what you would get if you walked into a bank and applied for a standard residential mortgage at the same loan-to-value ratio.
The scheme is not a government subsidy. There is no taxpayer money involved. Instead, the developer makes a lump-sum payment to the mortgage lender at the point of completion. This upfront payment effectively compensates the lender for offering you a below-market interest rate. From the developer's perspective, it is a sales incentive — a way to make their homes more affordable and attractive in a market where higher interest rates have squeezed buyers' borrowing power and monthly budgets.
It is important to understand that Own New Rate is not a single, standardised product. The exact terms — the rate reduction, the fixed period, the maximum property price, and the specific lender — vary depending on which developer you buy from and which lending partnerships they have established. However, the underlying mechanism is consistent: the developer subsidises the rate, the lender offers the discounted product, and the buyer benefits from lower monthly payments during the introductory period.
How Own New Rate Differs from Traditional Mortgage Products
With a traditional fixed-rate mortgage, the interest rate you are offered is determined by a combination of the Bank of England base rate, the lender's cost of funding, their profit margin, your creditworthiness, and your loan-to-value (LTV) ratio. The rate reflects genuine market conditions, and no third party is contributing to reduce it.
With Own New Rate, a third party — the housebuilder — is injecting capital into the arrangement to artificially lower the rate below what the market would otherwise dictate. Think of it as the developer paying part of your interest bill upfront, compressed into a lump sum given to the lender at the start of the mortgage term. The lender can then afford to offer you a rate that would otherwise be commercially unviable.
This distinction matters because it means Own New Rate mortgages are only available on new build properties from participating developers. You cannot access this type of subsidised rate on a resale property, a self-build project, or a new build from a developer that does not participate in the scheme. It also means the availability, terms, and rates can change frequently as developers negotiate new deals with lenders or adjust their sales strategies in response to market conditions.
How Does Own New Rate Work? The Mechanics Explained Step by Step
Understanding the mechanics of Own New Rate is crucial for evaluating whether it represents genuine value. Here is a detailed step-by-step breakdown of how the scheme operates from initial enquiry to mortgage completion:
Step 1: Developer Negotiates Lending Partnerships
Before any buyer gets involved, the housebuilder negotiates agreements with one or more mortgage lenders. These agreements specify the terms under which the lender will offer reduced-rate mortgages to buyers of the developer's properties. The developer commits to making a lump-sum subsidy payment to the lender for each buyer who takes up the scheme. The size of this payment determines how much the rate can be reduced and for how long.
For example, a developer might agree to pay a lender £10,000 per transaction. The lender then calculates how much rate reduction that £10,000 can fund over a two-year or five-year fixed period, given the loan amount and prevailing market rates. The result is the "Own New Rate" product that gets advertised to buyers.
Step 2: Buyer Reserves a Property and Explores Incentive Options
When you reserve a new build property from a participating developer, the sales team will present you with the available incentives. This might include Own New Rate, a contribution towards stamp duty, upgraded fixtures and fittings, part-exchange deals, or a combination thereof. In many cases, you will need to choose between Own New Rate and other financial incentives — developers typically cap the total value of incentives they offer on any single transaction.
It is at this stage that you should do your homework. Ask the sales adviser for the specific Own New Rate mortgage products available, including the lender name, the interest rate, the fixed period, any arrangement fees, and any conditions or restrictions. Get everything in writing.
Step 3: Mortgage Application Through Approved Lender
Once you have decided to proceed with Own New Rate, you apply for the specific mortgage product through the participating lender. This can usually be done through the developer's recommended mortgage broker or directly with the lender. The application process is essentially the same as any other mortgage application — you will need to provide proof of income, bank statements, identification, details of your deposit, and consent for credit checks.
The key difference is that you are applying for a specific Own New Rate product code that is only available in conjunction with a purchase from the participating developer. Standard mortgage products from the same lender will typically have higher rates.
Step 4: Valuation and Underwriting
The lender will conduct a standard mortgage valuation of the property. This is a critical step because the valuation must support the purchase price. If the surveyor values the property below the asking price, this can cause problems — we discuss this in detail later in this guide. The lender also underwrites your application in the usual way, assessing affordability, credit history, and compliance with their lending criteria.
Step 5: Developer Pays the Subsidy at Completion
On the day of completion, the developer makes the agreed lump-sum payment to the lender. This payment is separate from the property transaction itself — it is a commercial arrangement between the developer and the lender. From your perspective as the buyer, you simply complete on your new home and start making monthly mortgage payments at the reduced Own New Rate.
Step 6: You Enjoy Reduced Payments During the Fixed Period
For the duration of the fixed-rate period (typically two to five years), you pay the reduced monthly amount. Your mortgage statement will show the Own New Rate interest rate, and your payments will be calculated accordingly. There is nothing unusual about the mortgage from a day-to-day management perspective — it functions identically to any other fixed-rate mortgage.
Step 7: Reversion at the End of the Fixed Period
When the fixed-rate period ends, your mortgage reverts to the lender's standard variable rate (SVR) or a tracker rate, just like any other fixed-rate mortgage. At this point, the developer subsidy has been fully utilised, and you are on your own in terms of interest rates. You can (and almost certainly should) remortgage to a new competitive deal at this stage, just as you would with any other mortgage product reaching the end of its fixed term.
It is worth noting that your remortgage options at this point will depend on prevailing market rates, your property's value at the time, and your remaining loan balance. If property values have fallen, you may find yourself at a higher LTV than when you purchased, which could limit your remortgage options — a risk we explore in detail below.
Which Developers Offer Own New Rate?
Own New Rate is offered by many of the UK's largest and most prominent housebuilders. The scheme has gained significant traction since its introduction, and the list of participating developers continues to grow. As of 2025, the following major developers are known to offer Own New Rate or very similar developer-subsidised mortgage rate schemes:
Barratt Developments (including Barratt Homes and David Wilson Homes)
Barratt Developments, the UK's largest housebuilder by volume, was one of the early adopters of the Own New Rate concept. Both their Barratt Homes and David Wilson Homes brands offer subsidised mortgage rates across a wide range of developments. Barratt has partnered with multiple lenders to provide competitive rates, and their scale means they can often negotiate particularly favourable terms. Their Own New Rate products have been available on properties ranging from starter homes priced around £200,000 to larger family homes exceeding £600,000.
Taylor Wimpey
Taylor Wimpey, another of the UK's top-five housebuilders, offers their own version of the subsidised rate scheme across many of their developments nationwide. Taylor Wimpey has been proactive in partnering with lenders and often promotes their reduced-rate mortgage offerings prominently in their marketing materials. They have been known to offer particularly competitive two-year and five-year fixed rates, sometimes as low as 1% to 2% below the standard market rate for equivalent products.
Persimmon Homes (including Charles Church)
Persimmon, one of the UK's highest-volume builders, participates in Own New Rate through both their Persimmon Homes and premium Charles Church brands. Persimmon's offerings have been particularly popular with first-time buyers purchasing at lower price points, where even a modest rate reduction can make a significant difference to monthly affordability.
Bellway Homes
Bellway has integrated subsidised mortgage rate schemes into their sales strategy across developments in England, Scotland, and Wales. They typically offer a choice between the rate subsidy and other incentives, allowing buyers to select the option that provides the best value for their individual circumstances.
Vistry Group (including Bovis Homes and Linden Homes)
Vistry Group, which encompasses the Bovis Homes and Linden Homes brands, offers Own New Rate or equivalent subsidised rate products on selected developments. Their approach tends to vary by region and development, so availability should be confirmed with the specific sales office.
Redrow
Redrow, known for their heritage-style homes, has offered subsidised mortgage rates as part of their buyer incentive packages. Redrow's participation has been particularly notable on their larger family homes, where the absolute savings from a rate reduction can be substantial due to the higher loan amounts involved.
Crest Nicholson
Crest Nicholson participates in subsidised rate schemes on selected developments, often in the south of England where property prices — and therefore mortgage amounts — tend to be higher. Their focus on premium locations means the rate subsidy can translate into significant monthly savings.
Other Participating Developers
Beyond the major national housebuilders listed above, numerous regional and smaller developers also offer Own New Rate or similar schemes. These include Countryside Partnerships, Miller Homes, Avant Homes, Keepmoat Homes, Gleeson Homes, and many others. The availability of subsidised rates from smaller developers tends to be more variable and development-specific, so it is always worth asking directly whether a rate subsidy is available on the particular plot you are interested in.
It is also worth noting that developer participation can change over time. A developer may offer Own New Rate on one development but not another, or may introduce and withdraw the scheme depending on market conditions and their sales targets. Always confirm current availability with the specific sales office for the development you are considering.
Which Lenders Offer Own New Rate Mortgages?
The lender side of Own New Rate is equally important to understand, as the specific lender determines the mortgage terms, product features, and underwriting criteria you will be subject to. The following major lenders have been actively involved in Own New Rate partnerships:
Halifax (Part of Lloyds Banking Group)
Halifax has been one of the most prominent lenders in the Own New Rate space. As the UK's largest mortgage lender, Halifax's participation lends significant credibility to the scheme. Their Own New Rate products have typically been available at competitive rates across a range of LTV bands, and their underwriting criteria are well-established and widely understood by brokers.
Nationwide Building Society
Nationwide, the UK's largest building society, has partnered with several developers to offer Own New Rate mortgages. Nationwide's involvement is particularly noteworthy because building societies are member-owned and generally regarded as having a customer-focused approach. Their Own New Rate products have been competitive, and their willingness to lend at higher LTV ratios (up to 95% in some cases) has been particularly helpful for buyers with smaller deposits.
NatWest (including Royal Bank of Scotland)
NatWest has offered Own New Rate products through partnerships with various developers. Their products have typically been available at a range of LTV bands, and NatWest's well-established new build lending infrastructure means the application process tends to be straightforward.
Barclays
Barclays has participated in Own New Rate schemes, offering subsidised rate products to buyers of selected new build developments. Their products have been available across England, Scotland, and Wales, and Barclays' established position in the mortgage market means their underwriting and service processes are well-tested.
Other Participating Lenders
Additional lenders that have been involved in Own New Rate or similar developer-subsidised mortgage schemes include Santander, HSBC, Virgin Money, Leeds Building Society, and various specialist new build lenders. The landscape of participating lenders evolves as commercial agreements are established, renewed, or allowed to expire. Your mortgage broker or the developer's financial adviser will be able to confirm which lenders are currently offering Own New Rate products for the specific development you are considering.
One important practical consideration: because Own New Rate products are specific to particular developer-lender partnerships, you may find that the choice of lender is more limited than if you were shopping the open market for a standard mortgage. This means you cannot always select your preferred lender — you must use a lender that has an active Own New Rate agreement with the developer of the property you are buying. However, most major developers have partnerships with multiple lenders, giving you some degree of choice.
Eligibility Criteria: Who Can Use Own New Rate?
Eligibility for Own New Rate depends on meeting criteria set by both the participating developer and the participating lender. While specific requirements can vary, the general eligibility criteria are as follows:
Property Eligibility
- New build only: The property must be a new build home from a participating developer. Resale properties, even on new build estates, are not eligible.
- Participating development: Not all developments from a participating developer will necessarily offer Own New Rate. The scheme is typically offered on a development-by-development basis, depending on the developer's commercial strategy.
- Price thresholds: Some Own New Rate products have maximum property price limits, particularly for higher LTV products. These limits vary by lender and region.
- England, Scotland, and Wales: Own New Rate is generally available across Great Britain, though specific product availability may vary by region. Northern Ireland is typically excluded from most schemes due to different property law and lending regulations.
Buyer Eligibility
- First-time buyers and home movers: Unlike Help to Buy, which was restricted to first-time buyers in its later phases, Own New Rate is typically available to both first-time buyers and home movers. This is a significant advantage for those moving up the property ladder.
- Owner-occupiers only: You must intend to live in the property as your main residence. Buy-to-let purchasers and investors are not eligible for Own New Rate mortgages.
- Standard mortgage affordability: You must pass the lender's standard affordability assessment. The lender will assess your income, expenditure, credit history, and existing financial commitments in the usual way. The subsidised rate does not relax these criteria — the lender still needs to be satisfied that you can afford the mortgage.
- Stress testing: Lenders will stress-test your affordability not just at the Own New Rate, but at a higher rate to ensure you can cope when the fixed period ends and the rate reverts. This is standard practice for all fixed-rate mortgages and is required by the Financial Conduct Authority (FCA).
- Minimum deposit: You will need to meet the minimum deposit requirement for the specific Own New Rate product. This varies by lender and product but is typically between 5% and 25% of the property price, with better rates available at lower LTV ratios (i.e., larger deposits).
- UK resident: Most Own New Rate products require you to be a UK resident. Some lenders may consider applications from British citizens living overseas, but this is lender-specific.
- Age limits: Standard lender age criteria apply. Most lenders require the mortgage term to end before you reach 70 or 75, though some are more flexible.
What Does Not Affect Eligibility
- No income caps: Unlike many government schemes, Own New Rate does not impose income limits. Whether you earn £25,000 or £250,000, you can use the scheme (subject to lender affordability).
- No previous ownership restrictions: You do not need to be a first-time buyer. Existing homeowners looking to move can use Own New Rate.
- No requirement to sell first: If you are a home mover, most developers will accept your application regardless of whether you have sold your existing property, though some may require a sale to be in progress.
Real Savings Examples: How Much Can Own New Rate Actually Save You?
The headline appeal of Own New Rate is the promise of lower monthly mortgage payments. But how much can you actually save? The answer depends on the property price, your deposit, the subsidised rate versus the market rate, and the length of the fixed period. Below, we provide detailed worked examples at several price points and deposit levels to give you a realistic picture of the potential savings.
Note: These examples use illustrative rates based on typical market conditions. Actual rates will vary depending on the specific developer, lender, and date of application. All calculations assume a repayment mortgage over a 25-year term.
Example 1: First-Time Buyer — £250,000 Property, 10% Deposit
| Factor | Standard Mortgage | Own New Rate |
|---|---|---|
| Property Price | £250,000 | £250,000 |
| Deposit (10%) | £25,000 | £25,000 |
| Mortgage Amount | £225,000 | £225,000 |
| LTV Ratio | 90% | 90% |
| Interest Rate (2-year fixed) | 5.29% | 3.49% |
| Monthly Payment | £1,349 | £1,125 |
| Monthly Saving | £224 per month | |
| Total Saving Over 2-Year Fixed Period | £5,376 | |
In this scenario, a first-time buyer purchasing a £250,000 new build with a 10% deposit saves £224 per month — that is £2,688 per year, or £5,376 over the two-year fixed period. For many first-time buyers, this difference is transformative. It could be the difference between being able to afford the property and being priced out, or it could provide crucial breathing room in a tight monthly budget.
Example 2: First-Time Buyer — £300,000 Property, 5% Deposit
| Factor | Standard Mortgage | Own New Rate |
|---|---|---|
| Property Price | £300,000 | £300,000 |
| Deposit (5%) | £15,000 | £15,000 |
| Mortgage Amount | £285,000 | £285,000 |
| LTV Ratio | 95% | 95% |
| Interest Rate (2-year fixed) | 5.69% | 3.79% |
| Monthly Payment | £1,782 | £1,468 |
| Monthly Saving | £314 per month | |
| Total Saving Over 2-Year Fixed Period | £7,536 | |
At 95% LTV, the rate differential tends to be even more pronounced because standard mortgage rates at this level are already higher to reflect the increased risk to the lender. The Own New Rate subsidy can therefore deliver over £7,500 in savings over a two-year fixed period — a substantial sum that represents a real financial benefit.
Example 3: Home Mover — £450,000 Property, 20% Deposit
| Factor | Standard Mortgage | Own New Rate |
|---|---|---|
| Property Price | £450,000 | £450,000 |
| Deposit (20%) | £90,000 | £90,000 |
| Mortgage Amount | £360,000 | £360,000 |
| LTV Ratio | 80% | 80% |
| Interest Rate (5-year fixed) | 4.89% | 3.29% |
| Monthly Payment | £2,083 | £1,760 |
| Monthly Saving | £323 per month | |
| Total Saving Over 5-Year Fixed Period | £19,380 | |
For a home mover with a larger loan amount and a five-year fixed period, the cumulative savings can be truly significant — nearly £20,000 over five years. At this level, Own New Rate is not just a nice-to-have; it is a major financial consideration that could influence your decision about which property to buy.
Example 4: Larger Property — £600,000 Property, 15% Deposit
| Factor | Standard Mortgage | Own New Rate |
|---|---|---|
| Property Price | £600,000 | £600,000 |
| Deposit (15%) | £90,000 | £90,000 |
| Mortgage Amount | £510,000 | £510,000 |
| LTV Ratio | 85% | 85% |
| Interest Rate (2-year fixed) | 5.19% | 3.39% |
| Monthly Payment | £3,047 | £2,495 |
| Monthly Saving | £552 per month | |
| Total Saving Over 2-Year Fixed Period | £13,248 | |
On larger mortgages, the absolute savings become very substantial indeed. Over £550 per month is a meaningful reduction that could significantly impact your monthly cash flow and quality of life during those first critical years of homeownership.
The Impact of Rate Differential on Savings
The single most important factor determining your savings is the rate differential — the gap between the standard market rate and the Own New Rate. The larger this gap, the more you save. Based on typical Own New Rate offerings, the differential has ranged from around 1.0% to 2.5%, depending on the developer, lender, LTV band, and prevailing market conditions.
To illustrate the impact of different rate differentials on a £300,000 mortgage over a 2-year fixed period:
| Rate Differential | Monthly Saving (approx.) | Total 2-Year Saving (approx.) |
|---|---|---|
| 0.5% | £80 | £1,920 |
| 1.0% | £158 | £3,792 |
| 1.5% | £234 | £5,616 |
| 2.0% | £307 | £7,368 |
| 2.5% | £378 | £9,072 |
As you can see, even a modest 0.5% rate reduction delivers nearly £2,000 in savings over two years, while a 2.5% reduction approaches £10,000. The value of Own New Rate scales directly with both the rate differential and the loan amount.
Own New Rate vs. Other Developer Incentives: A Head-to-Head Comparison
One of the most important decisions you will face when buying a new build is which incentive package to choose. Most developers cap the total value of incentives they offer, meaning you often need to choose between Own New Rate and alternative incentives such as stamp duty contributions, furniture packages, or price reductions. Here is how Own New Rate compares to the most common alternatives:
Own New Rate vs. Stamp Duty Contribution
A stamp duty contribution is a cash payment from the developer towards your stamp duty land tax (SDLT) bill. For a property priced at £400,000 purchased by a home mover, the stamp duty bill would be £10,000 (at current 2025 rates). If the developer offers to pay this instead of providing Own New Rate, which is the better deal?
Let us compare using a £400,000 property with a 15% deposit (£340,000 mortgage):
| Incentive | Value | How It Helps |
|---|---|---|
| Stamp Duty Contribution | £10,000 (one-off) | Reduces upfront costs at completion |
| Own New Rate (1.8% reduction, 2-year fix) | ~£14,400 (over 2 years) | Reduces monthly payments for 2 years |
| Own New Rate (1.5% reduction, 5-year fix) | ~£28,800 (over 5 years) | Reduces monthly payments for 5 years |
In most cases, Own New Rate delivers greater total value than a stamp duty contribution, especially on five-year fixed deals with larger mortgages. However, the stamp duty contribution provides immediate cash benefit at completion, which may be more valuable if you are tight on funds at the point of purchase. The decision depends on your individual financial circumstances and priorities.
For a more detailed analysis of developer incentives, see our guide: New Build Incentives Explained.
Own New Rate vs. Price Reduction
Some buyers prefer to negotiate a direct price reduction rather than accepting incentives. A lower purchase price reduces your mortgage amount permanently, not just for a fixed period. It also reduces your stamp duty bill and means you start with more equity in the property.
Consider this comparison on a £350,000 property with a 10% deposit:
- Option A — Own New Rate: Purchase at £350,000, mortgage of £315,000, rate of 3.49% for 2 years (standard rate 5.29%). Monthly saving of £224 for 2 years = £5,376 total benefit.
- Option B — £10,000 price reduction: Purchase at £340,000, mortgage of £306,000, rate of 5.29%. Lower monthly payment of £1,308 vs £1,349 on the £315,000 mortgage = £41/month lower. But this saving persists for the entire mortgage term and you have £10,000 more equity from day one.
Over the short term, Own New Rate delivers much larger monthly savings. But over the long term, a price reduction builds permanent equity and reduces the total interest paid over the mortgage lifetime. The right choice depends on whether you prioritise short-term cash flow or long-term financial position.
For a deeper dive into this comparison, read our analysis: Developer Incentives vs. Price Discounts.
Own New Rate vs. Furniture/Upgrade Packages
Some developers offer upgraded kitchens, flooring, carpets, or furniture packages as an alternative to financial incentives. While these can be attractive, they are generally worth less than their stated "retail value" (developers obtain materials at trade prices), and they do not help with your mortgage affordability. In almost all cases, Own New Rate or a financial incentive will provide better value than a furnishing package. The exception is if you are purchasing an investment-grade property where premium finishes will command higher rent — but remember, Own New Rate is not available for buy-to-let purchases.
The Fine Print: Conditions, Restrictions, and Things to Watch Out For
Like any financial product, Own New Rate comes with conditions and potential pitfalls that you need to be aware of before committing. Here are the key considerations:
Limited Lender Choice
As noted earlier, you can only access Own New Rate through lenders that have a partnership agreement with your chosen developer. This limits your ability to shop around for the absolute best mortgage deal on the open market. While the subsidised rate may be lower than anything else available, the other terms of the mortgage (fees, flexibility, overpayment options, portability) may not be as competitive as products from lenders outside the scheme.
Arrangement Fees
Some Own New Rate mortgage products carry arrangement fees, which can range from £0 to £1,500 or more. A high arrangement fee can erode the savings from the reduced rate, particularly on smaller mortgages or shorter fixed periods. Always factor the arrangement fee into your total cost comparison.
Early Repayment Charges (ERCs)
Own New Rate mortgages typically carry standard early repayment charges during the fixed period. These are usually between 1% and 5% of the outstanding balance, depending on the lender and how far into the fixed period you are. This means if you need to sell the property, move, or remortgage before the fixed period ends, you could face a significant penalty. Make sure you understand the ERC structure before committing.
Overpayment Limits
Most fixed-rate mortgages, including Own New Rate products, allow overpayments of up to 10% of the outstanding balance per year without penalty. However, some products have more restrictive overpayment terms. If you plan to make overpayments, check the specific terms of the Own New Rate product you are considering.
Portability
Some Own New Rate mortgages may not be portable — meaning if you move house during the fixed period, you cannot take the mortgage with you. Even if the mortgage is technically portable, the subsidised rate was funded specifically for the original transaction, so portability to a different property may not include the rate subsidy. This is a crucial point to clarify with the lender before proceeding.
Impact on Other Incentives
Developers typically have a maximum total incentive value they are willing to offer, often expressed as a percentage of the property price (commonly 3-5%). If you take Own New Rate, the value of the rate subsidy counts towards this cap, which may reduce or eliminate other incentives you might have received. Make sure you understand the total incentive package and how choosing Own New Rate affects the other benefits available to you.
Lender Valuation Requirements
The lender will conduct a valuation of the property, and the value of developer incentives (including the Own New Rate subsidy) may be taken into account. If the total incentive package exceeds the lender's threshold (commonly 5% of the property value), the lender may reduce the valuation amount, which could affect your LTV ratio and the mortgage terms available. This is an important consideration that we explore in more detail below.
Impact on Property Valuation: Will the Surveyor Down-Value?
One of the most common concerns about Own New Rate and other developer incentives is whether they will affect the mortgage valuation of the property. This concern is well-founded and worth understanding in detail.
How Lenders View Developer Incentives
When a mortgage lender commissions a valuation of a new build property, the surveyor is asked to provide an opinion of the property's open market value — what it would sell for on the open market without any special incentives attached. The surveyor is also asked to note any incentives being offered by the developer.
Lenders have internal policies about the maximum level of incentives they will accept before adjusting the valuation. A common threshold is 5% of the property price. If the total value of incentives (including the Own New Rate subsidy, any contribution towards stamp duty, any upgraded specifications, etc.) exceeds this threshold, the lender may:
- Reduce the valuation by the amount exceeding the threshold
- Require you to increase your deposit to maintain the required LTV ratio
- Decline the application if the adjusted figures do not meet their criteria
How the Own New Rate Subsidy Is Valued
The treatment of the Own New Rate subsidy in the valuation process varies between lenders. Some lenders treat the subsidy as a separate commercial arrangement between themselves and the developer that does not constitute a buyer incentive (since the money goes from the developer to the lender, not to the buyer). Under this interpretation, the subsidy does not count towards the incentive cap.
Other lenders take a more conservative view and include the value of the rate subsidy in the total incentive calculation. This is an area where specific lender policies matter enormously, and it is one reason why Own New Rate products are structured as specific lender-developer partnerships — the participating lender has already agreed to the treatment of the subsidy within their valuation framework.
Does the Developer Inflate the Price?
This is the million-pound question that every savvy buyer should ask. If a developer is spending, say, £8,000 subsidising your mortgage rate, are they simply adding £8,000 (or more) to the asking price to compensate? The honest answer is: it is complicated.
Developers set their prices based on a complex mix of factors including land costs, construction costs, profit targets, market demand, competitor pricing, and the overall package of incentives they intend to offer. It is not usually as simple as "the price is £8,000 higher because of Own New Rate." However, it is also true that no developer is absorbing the full cost of the subsidy from pure goodwill — the cost is factored into their business model somewhere.
The most pragmatic approach is to compare the asking price of the Own New Rate property with comparable properties in the area — both new builds from other developers and resale properties. If the developer's price is broadly in line with the market, the subsidy is likely being funded from the developer's margin rather than being loaded onto the buyer. If the price seems inflated compared to equivalents, the subsidy may be partly or wholly reflected in the purchase price, reducing or eliminating its true value.
How to Calculate If Own New Rate Is Genuinely Saving You Money
To determine whether Own New Rate represents genuine value, you need to conduct a rigorous comparison. Here is a step-by-step method:
Step 1: Get the Best Standard Mortgage Quote
Before accepting Own New Rate, speak to an independent mortgage broker and get the best standard mortgage rate available for your circumstances, deposit, and the property in question. This is your benchmark.
Step 2: Calculate the Total Cost of Each Option Over the Fixed Period
For both the Own New Rate product and the best standard mortgage, calculate:
- Total monthly payments over the fixed period
- Arrangement fees
- Valuation fees
- Legal fees (if different between options)
- Any other costs specific to the product
The total cost of the Own New Rate option should be compared to the total cost of the standard mortgage option. Do not just compare interest rates — look at the full picture.
Step 3: Factor In Lost Incentives
If choosing Own New Rate means forgoing other incentives (such as a stamp duty contribution or price reduction), calculate the value of those lost incentives and add them to the effective cost of the Own New Rate option.
Step 4: Consider the Property Price
Research comparable properties in the area to determine whether the developer's asking price is at a premium. If the price is inflated by, say, £5,000 compared to equivalent homes, that reduces the net benefit of the Own New Rate subsidy by £5,000 (plus the additional interest you will pay on that £5,000 over the mortgage term).
Step 5: Think Beyond the Fixed Period
Own New Rate saves you money during the fixed period, but what happens after? If you have bought at an inflated price, you will be carrying that premium for the entire 25 or 30-year mortgage term. A lower purchase price, on the other hand, saves you money every single year.
The general rule of thumb: if the net value of the Own New Rate savings (after accounting for fees, lost incentives, and any price premium) exceeds the value of the alternative incentive package by a meaningful margin, Own New Rate is likely the better choice. If the figures are close, other factors like your need for short-term cash flow relief versus long-term equity building should guide your decision.
How to Apply for Own New Rate: The Full Process
Applying for an Own New Rate mortgage follows a structured process. Here is what to expect at each stage:
1. Research and Shortlist Developments
Start by identifying new build developments that offer Own New Rate. Check developer websites, visit sales offices, and ask about available incentive packages. Make a note of which lenders and rates are available at each development.
2. Reserve Your Plot
Once you have found a suitable property, you will be asked to pay a reservation fee (typically £500 to £1,000) to secure the plot. At this stage, confirm your intention to use Own New Rate and get the specific product details in writing.
3. Speak to an Independent Mortgage Broker
While the developer's sales office will likely recommend their own financial adviser, it is strongly advisable to also consult an independent whole-of-market mortgage broker. They can confirm whether the Own New Rate product is genuinely the best option for your circumstances or whether a standard product might be better. Even if you proceed with Own New Rate, an independent broker can help you understand the full picture.
4. Submit Your Mortgage Application
Apply for the Own New Rate mortgage product through the participating lender. You will need to provide standard documentation: proof of identity, proof of address, three months' payslips (or two years' SA302s if self-employed), three months' bank statements, and details of any existing financial commitments.
5. Await Valuation and Mortgage Offer
The lender will instruct a valuation of the property and process your application. The timeline is typically 2-6 weeks for a mortgage offer, though this can vary depending on the lender's processing speed and whether any additional information is required.
6. Instruct Solicitors and Complete Legal Work
Once your mortgage offer is issued, your solicitor will carry out the standard conveyancing process — title searches, reviewing the contract, checking planning permissions, and so on. New build conveyancing can take longer than resale due to the need to review developer warranties, management company arrangements, and (for off-plan purchases) the build progress.
7. Exchange and Completion
Exchange of contracts typically happens 28 days before the anticipated completion date for ready-to-move-in properties, or earlier for off-plan purchases. At completion, the developer pays the rate subsidy to the lender, you move into your new home, and your mortgage payments begin at the Own New Rate.
Typical Timeline
| Stage | Typical Duration |
|---|---|
| Reservation to mortgage application | 1-2 weeks |
| Mortgage application to offer | 2-6 weeks |
| Mortgage offer to exchange | 2-8 weeks |
| Exchange to completion | 1-4 weeks (ready homes) or longer (off-plan) |
| Total (ready homes) | 6-20 weeks |
Can You Combine Own New Rate with Other Schemes?
A natural question is whether you can combine Own New Rate with other buyer assistance schemes to maximise your benefits. The answer depends on the specific schemes involved:
Own New Rate + Shared Ownership
In most cases, Own New Rate is not available on Shared Ownership properties. Shared Ownership involves purchasing a share of the property (typically 25-75%) and paying rent on the remainder, and the mortgage products available for Shared Ownership are different from standard purchase mortgages. The developer-lender partnerships that underpin Own New Rate are generally structured for outright purchases only.
Own New Rate + First Homes
The First Homes scheme offers a 30-50% discount on new build properties for eligible first-time buyers. Whether Own New Rate can be combined with First Homes depends on the specific developer and lender, but in practice it is uncommon. The discounted price under First Homes already provides substantial savings, and the additional complexity of layering a rate subsidy on top may not be supported by lenders.
Own New Rate + Deposit Unlock
It may be possible to combine Own New Rate with the Deposit Unlock scheme, which enables 95% LTV mortgages on new builds through developer-provided insurance. However, this depends on the specific lender and developer arrangements. If the same lender offers both Own New Rate and Deposit Unlock products, there is a chance they can be combined. Ask your developer and broker for confirmation.
Own New Rate + Lifetime ISA
You can absolutely use a Lifetime ISA (LISA) bonus towards your deposit while also benefiting from Own New Rate. The LISA is a government savings incentive that provides a 25% bonus on savings up to £4,000 per year, and it does not conflict with any developer incentive scheme. This is one of the most straightforward combinations available.
Own New Rate + Developer Part-Exchange
If you are a home mover, some developers offer a part-exchange service where they buy your existing home, providing you with a guaranteed sale and a chain-free purchase. Part-exchange can sometimes be combined with Own New Rate, although the total incentive value is likely to be capped. The developer's purchase offer on your existing home may also be below market value, so weigh the overall package carefully.
For a comprehensive overview of government buyer assistance schemes, see our guide: Help to Buy vs. Shared Ownership for New Builds.
Pros and Cons of Own New Rate: A Balanced Assessment
Advantages
- Significantly lower monthly payments: The most obvious benefit. Depending on the rate differential and loan amount, you could save hundreds of pounds per month during the fixed period.
- Improved affordability: The lower rate means you may be able to borrow more or purchase a more expensive property within your affordability limits.
- Available to all buyers: Unlike many government schemes, Own New Rate is open to first-time buyers and home movers, with no income caps.
- No equity to repay: Unlike the old Help to Buy equity loan, you do not have to repay a government stake in your home. The subsidy is a gift from the developer to the lender — there is no debt attached to it from your perspective.
- Straightforward process: The mortgage application process is essentially the same as any other fixed-rate mortgage. There is no additional paperwork or bureaucracy beyond the standard application.
- Rate certainty: Like any fixed-rate mortgage, you know exactly what your payments will be for the duration of the fixed period, providing budgeting certainty.
Disadvantages
- Limited lender choice: You can only use a lender with an active Own New Rate agreement with your developer, reducing your ability to shop around.
- Temporary benefit: The rate subsidy only lasts for the fixed period. After that, you revert to market rates and will need to remortgage.
- Potential price inflation: The developer may partially or fully recover the subsidy cost through a higher asking price, reducing the net benefit.
- May reduce other incentives: Choosing Own New Rate may mean forgoing other valuable incentives like stamp duty contributions or price reductions.
- Valuation risk: The subsidy may affect the lender's valuation of the property, potentially complicating the transaction.
- Early repayment charges: If you need to sell or remortgage during the fixed period, ERCs could be substantial.
- Not available on all properties: Own New Rate is limited to specific new build developments from participating developers. Your preferred property may not be eligible.
Frequently Asked Questions About Own New Rate
Is Own New Rate a government scheme?
No. Own New Rate is a private-sector initiative funded by housebuilders and facilitated by mortgage lenders. There is no government funding, guarantee, or regulation specific to Own New Rate beyond the standard FCA regulation that applies to all mortgage products.
Do I have to use the developer's recommended broker?
No, but it can be helpful. The developer's financial adviser will be familiar with the Own New Rate products available and can streamline the application process. However, you should also consult an independent broker to ensure you are getting the best overall deal.
What happens if I want to sell during the fixed period?
You can sell your property at any time, but you will need to repay the outstanding mortgage balance, which may trigger early repayment charges during the fixed period. The subsidised rate does not create any additional obligation — you are simply subject to the standard ERC terms of your mortgage product.
Can I overpay my mortgage while on Own New Rate?
Typically, yes, up to the overpayment limit specified in your mortgage terms (usually 10% of the outstanding balance per year). Overpayments during the low-rate period can be a particularly effective strategy, as more of each payment goes towards reducing your principal balance when interest charges are lower.
What happens at the end of the fixed period?
Your mortgage reverts to the lender's standard variable rate (SVR) or a tracker rate, just like any other fixed-rate mortgage. You should plan to remortgage to a new competitive product before the fixed period ends. Set a reminder for 3-6 months before the end date to start the remortgage process.
Is Own New Rate available on off-plan purchases?
In many cases, yes. However, the specific rate and product available may change between the date of reservation and the date of completion, as developer-lender agreements are periodically renegotiated. Clarify with the developer whether the rate quoted at reservation will be honoured at completion or whether it may change.
Can I use Own New Rate if I am self-employed?
Yes, provided you meet the lender's standard criteria for self-employed applicants. This typically means providing two to three years of accounts or SA302 tax calculations. Self-employment does not disqualify you from Own New Rate, but the underwriting process may be more complex.
Conclusion: Is Own New Rate Worth It?
Own New Rate is a genuinely valuable incentive that can save buyers thousands of pounds in mortgage payments during the fixed-rate period. In a high-interest-rate environment, the ability to access a significantly reduced rate — sometimes 1.5% to 2.5% below the market — provides real, tangible financial relief. For many buyers, particularly first-time purchasers stretching to afford their first home, the lower monthly payments can make the difference between buying and not buying.
However, Own New Rate is not a magic bullet. The savings are temporary, limited to the fixed period, and may be partially offset by a higher purchase price, reduced alternative incentives, or less favourable mortgage terms in other areas. The scheme also ties you to specific lenders, limiting your ability to shop the open market.
The key to making a smart decision is to do the maths. Calculate the total net benefit of Own New Rate after accounting for all costs, fees, and lost alternative incentives. Compare this with the total cost of the best standard mortgage available for the same property. Consider your time horizon — if you plan to stay in the property long-term, a lower purchase price may be more valuable than a temporary rate reduction. If you prioritise short-term cash flow and plan to remortgage within a few years anyway, Own New Rate may be the better choice.
Whatever you decide, make sure you understand the full picture before committing. Consult an independent mortgage broker, research comparable property prices, and read the fine print carefully. Own New Rate is a powerful tool in the new build buyer's toolkit — but like any tool, it works best when used wisely.
For more guidance on new build purchase incentives and financial considerations, explore our related guides: