New build home buyers stand to benefit from reduced mortgage rates, courtesy of a new scheme engineered to grant homeowners more control over their monthly expenses. The Own New Rate Reducer scheme presents new build customers with the opportunity to secure lowered fixed mortgage rates spanning over either two or five years. This is made possible through lenders tapping into completion incentives provided by the housebuilder.

Here’s a breakdown of how the Own New Rate Reducer works:

Typically, homebuilders extend incentives to customers, such as covering LBTT costs or contributing towards the deposit. Under the Rate Reducer scheme, these incentives are redirected to slash the buyer’s mortgage rate, thereby making their monthly payments more manageable.

Buyers can opt to distribute incentives across the initial two or five years of their mortgage term, contingent on the product options available from participating mortgage lenders. For example, lenders are currently offering 2 year fixed rate 90% LVT mortgage rates at 3.03% which is a £570 per month saving in comparison to the usual lender rate.*

While borrowers must still meet standard lender affordability assessments, this scheme could be particularly beneficial for those encountering barriers due to higher rates. By utilising the incentive to lower the mortgage rate, buyers can enjoy more breathing room in their monthly payments during the early stages of homeownership. However, it’s important to note that once the initial period lapses, borrowers will transition to a standard mortgage rate, potentially leading to a significant increase in payments.

Participating lenders in the Own New Rate Reducer scheme include Halifax and Virgin Money, with Gen H, Furness Building Society, and Perenna also set to offer mortgages through the scheme.

If you’re keen on purchasing a new build home via the Own New Rate Reducer scheme, after selecting a property from a participating developer, seek guidance from a mortgage broker with the requisite training to access this scheme. They will assist you in securing the best mortgage deal from one of the lenders involved. I

The Rate Reducer presents deals with rates significantly lower than current market offerings, potentially resulting in monthly payment reductions amounting to hundreds of pounds. Moreover, a lower interest rate deal facilitates a faster reduction in the mortgage balance, contributing to overall savings.


* Rates as at 15/11/23. Assumes £350k loan, 35-year term. Lending criteria (e.g. LTV and loan amount) are at the discretion of the lender.