Own New Rate Reducer
How a developer-funded contribution can cut your mortgage rate on a new build, and what to check before you reserve.
Reviewed and signed off by Patricia Ogunfeibo
Solicitor and Chartered Tax Adviser, both non-practising. UK property since 1986.
Last reviewed
- Applies to:
- England
- Last reviewed:
- Next review:
- November 2026
Checked against FCA and professional regulators, lender and industry sources. Sources are listed at the end of this guide.
Scheme and lender rules can change. How we label evidence.
Prefer to listen? This guide is available as audio, roughly 9 minutes of listening.
Executive Summary
Own New Rate Reducer is a private scheme, not a government one. A housebuilder can put an incentive of 3% or 5% of the purchase price towards your mortgage, and the lender uses that money to cut your interest rate for the initial fixed period rather than paying it to you as cash.
The headline rates look dramatic. The important question is not how low the rate goes, but what the same incentive would be worth to you as a price reduction or a deposit contribution, and what your payment looks like when the fixed period ends.
This guide explains the mechanics, the eligibility, the reported rate examples from 2026, and the questions to put to a whole of market mortgage broker before you reserve a plot.
How Own New Rate Reducer Works
Own New is a private property finance company that works with mortgage lenders and a large number of UK housebuilders. When a builder agrees to give you an incentive on a plot, that money can be routed to your lender instead of to you. The lender then reduces the interest you pay during the initial two or five year fixed period.
You still apply for a normal mortgage, you are still credit checked, and you still have to pass the lender's affordability assessment. The only thing that changes is where the builder's incentive lands.
Where the money goes
The incentive is paid to the lender, not to you. That is the single most important thing to understand before you compare it with a price reduction or a cash contribution towards your deposit.
| Feature | Details |
|---|---|
| Who funds it | The housebuilder, from the incentive budget on that plot. There is no government money involved. |
| Incentive size | Typically 3% or 5% of the purchase price. If the builder is not offering an incentive on the plot, the scheme is not available on it. |
| Fixed period | Two or five years, depending on the product you choose. |
| Property type | New build homes only, on participating developments. |
| Who qualifies | First-time buyers and home movers. Not available for buy to let or second homes. |
| Broker requirement | You must apply through a mortgage broker registered with the scheme. |
| Affordability | You are assessed at the full, unsubsidised rate, so the scheme does not increase how much you can borrow. |
| After the fixed period | You revert to the lender’s standard variable rate unless you remortgage. |
Reported Rate Examples (2026)
The figures below were reported in the UK press during 2026. They are included to show the scale of the reduction, not as offers. Rates change constantly and vary by lender, plot, deposit size and personal circumstances.
Illustrative only
These are reported examples, not quotes, offers or recommendations. Your own rate depends on the lender, the plot, your deposit and your circumstances. Confirm current products with a qualified mortgage broker.
| Scenario | Reported detail |
|---|---|
| e.g. large deposit | With a 5% builder incentive and a deposit of 40% or more, rates reported as low as around 0.50% during the fixed period. |
| e.g. 25% deposit | Rates around 1.14% reported. |
| e.g. 10% deposit | A £200,000 mortgage reported at around 2.43% on a two year fix. |
| Market comparison | The best two year fix at 80% loan to value was reported at around 4.79% at the time. |
| Smaller deposits | Rates of roughly 2.2% to 3.66% reported, still well below comparable market pricing. |
Rate Reduction or Price Reduction?
A lower rate helps if your pressure point is the monthly payment. A lower purchase price helps more if your pressure point is the cash you need up front, or if you plan to stay in the home for a long time.
Three things to weigh:
- The subsidy stops at the end of the fixed period. Diary that date from day one and plan to remortgage before it.
- A smaller mortgage from a price reduction keeps working for the whole term, not just two or five years.
- New builds often carry a premium over comparable second hand homes, so compare the plot against what else your money buys locally.
Ask a whole of market broker to model the total cost over five and ten years both ways, using the same purchase and the same deposit.
What to Check Before You Reserve
Reservation fees are usually non refundable in practice once you are committed, so do this work first.
- Confirm in writing that the plot carries a 3% or 5% incentive and that it can be used through the scheme.
- Ask what the builder would offer instead: a price reduction, a deposit contribution, or extras such as flooring and turf.
- Get a payment illustration at the reverted standard variable rate, not just the subsidised rate.
- Check whether the valuation supports the asking price, since a subsidised rate does not change what the home is worth.
- Check completion timescales. A long build programme can outlast your mortgage offer.
Run the numbers yourself first
Use the Total Cost to Complete calculator to see the full cash you need on day one, then use the Rent v Buy calculator to compare staying put with buying. Both are free.
Myths vs Facts
MYTH
A 0.5% mortgage rate means the home is cheaper.
FACT
The price is unchanged. The builder has redirected an incentive to your lender. The same money taken off the purchase price would give you a smaller mortgage for the whole term.
MYTH
With Own New Rate Reducer, the low rate lasts for the life of the mortgage.
FACT
It lasts for the initial two or five year fixed period only. After that you revert to the standard variable rate unless you remortgage.
MYTH
A lower rate means I can borrow more.
FACT
Affordability is stress tested at the full rate, so your maximum borrowing is unchanged.
Frequently Asked Questions
Is Own New Rate Reducer a government scheme?
No. It is a private scheme funded by housebuilders and delivered through participating mortgage lenders. There is no government guarantee or subsidy attached to it.
Do I have to be a first-time buyer?
No. Both first-time buyers and home movers can use it, provided the plot carries a builder incentive and you meet the lender’s normal criteria. It is not available for buy to let or second homes.
Does the reduced rate mean I can borrow more?
No. Lenders assess affordability at the full, unsubsidised rate, so the scheme lowers your payments during the fixed period but does not increase your maximum loan.
What happens when the fixed period ends?
The subsidy stops and you move to the lender’s standard variable rate unless you remortgage. Payments can rise sharply, so plan the remortgage well before the fixed period expires.
Is a rate reduction better than money off the price?
It depends on your circumstances. A rate reduction helps most when the monthly payment is the constraint and you expect to move or remortgage within a few years. A price reduction shrinks the mortgage for the whole term and reduces the cash you need up front. Ask a broker to model both.
Can I use it on any new build?
Only on participating developments where the builder is offering a 3% or 5% incentive on that specific plot. Ask the sales office to confirm in writing before you reserve.
Action Checklist
Where this comes from
Each source is labelled so you can tell a government rule from market practice, and both from our own view. Read our evidence standard.
- Market practiceOwn New, Rate Reducer product information
- Regulatory ruleFCA Financial Services Register
- Our guidancetenant2owner editorial standards and our own interpretation
Your next steps
You do not need to read everything. Based on this guide, these are the useful next moves.
1. Do this now
Readiness CheckAround 90 seconds. See how close you are and what to fix first.
2. Read this next
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