What is the Own New Rate Reducer Mortgage scheme, and how does it work? 

The Own New Rate Reducer Mortgage scheme, launched in February 2024, aims to make purchasing a new-build property cheaper.   

Property finance company Own New works with lenders and homebuilders to offer reduced mortgage rates to those hoping to get on the property ladder.  


  • The Own New Rate Reducer scheme makes buying a new build home cheaper.  
  • You may access significantly cheaper rates for your initial mortgage term.  
  • However, there are many pros and cons to consider.     

What is the Own New Rate Reducer scheme?  

The Own New Rate Reducer scheme makes buying a new build home cheaper by helping homebuyers access mortgage rates much lower than traditional ones for the initial period.   

This scheme is open to first-time buyers and those planning to move. It helps them pay off more of their mortgage’s capital value and build up more equity in their homes.   

Own New work with over 60 homebuilders, including Barratt Developments, Bellway and Taylor Wimpey.   

Homebuilders often offer incentives such as cashback or a discount to encourage people to buy. Though through the Own New scheme, they invest this into your mortgage, lowering your interest rate.  

Big lenders already involved in this scheme include Virgin Money and Halifax, with more lenders expected to join.   

How much will I pay ?   

Rates start at 0.99% for a two-year fixed-rate mortgage with a 60% loan to value (LTV).  

The interest rates are higher if you have a higher LTV, which is the percentage of borrowing you have against your home. However, it’s worth stressing not everyone can access this rock-bottom rate.   

Own New also offers the Deposit Drop scheme, currently available in the North East and Yorkshire. Under this scheme, you can buy a new-build home with a 5% deposit and access competitive mortgage rates.   

There are plans to expand the Deposit Drop scheme this year, but you need to use a participating homebuilder. There may be caps on the property value or maximum amount you can borrow.  

How does the scheme work?  

First, it’s important to stress that these are traditional mortgages – but you must access them via Own New.  

The property developer will agree to contribute 3% or 5% of the purchase price, which is sent to your mortgage lender via Own New.  

This is offset against the mortgage interest, so your rate falls in line with the housebuilder’s contribution, which results in lower monthly payments for your initial term.   

Once you find your dream new build, you must arrange a mortgage via an approved Own New broker and then go through the usual new build buying process.  

Who is eligible for the Own New Rate Reducer scheme?  

The only eligibility for the Own New Rate Reducer scheme is that you’re buying a new build property.  

So, this scheme is open to:  

  • First-time buyers  
  • Home movers  
  • Those who’ve previously owned property  

Which lenders are available via the Own New Rate Reducer scheme?  

This scheme launched with Halifax and Virgin Money, with more lenders expected to join soon, including Furness Building Society, Perenna and Gen H.  

Read a beginners guide to mortgages

What are the pros and cons of the Own New Rate Reducer scheme?  

It’s worth being aware of the advantages and disadvantages of this scheme before applying.  

The pros of the Own New Rate Reducer scheme  

  • Lower monthly mortgage payments: You’ll benefit from lower monthly mortgage payments compared to a mortgage on the open market. These lower repayments could potentially save thousands of pounds over the initial term.  
  • Flexibility over lower rates or a small deposit: Own New offers two schemes that could make it cheaper to get on the property ladder – Rate Reducer and Deposit Drop. You can choose based on what’s best for your circumstances.  
  • You have to use a mortgage broker: Using a mortgage broker can make your homebuying journey much easier, as they can find the best deal for you and boost your chances of a successful application.   

The cons of the Own New Rate Reducer scheme  

  • You may face higher rates in the future: Mortgage rates are currently high, so if they don’t fall by the time your initial term ends, your monthly mortgage payments could significantly increase.  
  • The lowest rates require a bigger deposit: As mentioned, a 0.99% rate is available, but the catch is that you need a 40% deposit, which can be tens of thousands of pounds.   
  • Limited choices: You must buy a new home and use a homebuilder approved by the scheme.  
  • New builds tend to be more expensive: It’s usually more costly to buy a new build than a home that’s already been lived in, and new builds depreciate in value.  

What are the alternatives to the Own New Rate Reducer scheme?  

If you’re hoping to get on the property ladder or want help buying your next home, there are many schemes you may be able to benefit from.   

  • Mortgage guarantee scheme: This UK government-run scheme, available until the end of June 2025, allows first-time buyers to apply for a mortgage with a 5% deposit.  
  • First Homes scheme: The scheme provides discounted homes to first-time buyers in England who otherwise wouldn’t be able to afford one.  
  • Shared ownership: Shared ownership schemes are run by housing associations and are often open to first-time buyers. They allow you to take out a mortgage on a portion of your home and pay rent on the remainder.  
  • Deposit Unlock scheme: This allows home movers with an existing mortgage and first-time buyers to access 95% mortgages on new builds.    


Thanks to Lisa-Marie Voneshen at Unbiased.co.uk