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What is the Own New scheme?

Anya GairAnya Gair
Last Updated 26 March 2024

In this article, we’ll explain how the Own New schemes work, and whether they are the right option for you.

In this guide

What is Own New?

The two most common affordability hurdles would-be buyers face when trying to get on the ladder are having a large enough deposit saved up to buy a house, and affording the monthly mortgage payments with current interest rates. Own New offers a range of buying schemes that help home purchasers overcome these stumbling blocks and be able to afford a new build property. 

They do this by working with home builders and lenders to enable them to offer reduced rates and small deposit mortgages to buyers through their two buying schemes - Rate Reducer and Deposit Drop.

Learn more: Your guide to purchasing new builds

You might also like: 6 ways to get lower mortgage rates

What is Rate Reducer?

Rate Reducer is Own New’s low mortgage rate scheme that offers rates as low as 0.99% to buyers who purchase a new build home with certain housebuilders and mortgage lenders. Rates this low haven’t been seen since autumn 2021 - the current average rates on the market today are over 5% - so their scheme is a game-changer in the mortgage market.

It works by the homebuilder offering 3-5% of the full property price to the buyer as an incentive to buy one of their new build homes. Own New then offsets this against the mortgage interest to reduce the monthly payments.

Depending on the lender, you can choose to spread this benefit over the first two or five years of the mortgage. For example, for a £300,000 home Virgin Money will cut their 4.79% two year fixed rate to 0.99% - making your mortgage payments drop from £1,116 to £678*. But to do this, you need a 40% downpayment, which includes 5% from the homebuilder. 

The rates offered through this scheme vary depending on what homebuilder and lender you go with, as well as how much deposit you have. For example, Barratt Homes offers 1.89% on a 2 year fixed rate, but you need to have 20% of the property price saved up, plus 5% from the homebuilder.

What is Deposit Drop?

Deposit Drop is the other scheme offered by Own New alongside Rate Reducer. It lets you purchase a new build property with just a 5% deposit saved up - significantly less than the 15% average. Deposit Drop works in the same way as the Deposit Unlock schemes offered by some homebuilders.

Read more: How to buy a home with a low deposit

Who is eligible for Own New?

Own New schemes are available to anyone buying a new build property from one of the participating home developers. Both new buyers and home movers can use this scheme - it’s not just for first-time buyers. Plus, if you are self-employed, all of Own New’s mortgage partners assess your income based on your current earnings. The catch is you have to arrange your mortgage with an approved Own New mortgage broker - like us!

What do you need to consider?

The reduced rates offered on the Own New scheme are only available during your initial introductory period of two to five years. After this, your interest rate will jump up, so you need to factor this into your plans when purchasing a property through this scheme.


Another thing to consider is you will have a smaller choice of properties to choose from if you’re using Own New, as not all new builds are eligible for the scheme. You also might not get the headline rate of 0.99% if you don’t have a 40% deposit saved.

Only have a small deposit saved? Here’s all the ways you can get on the ladder with a low deposit.

Can you use both Rate Reducer and Deposit Drop?

No, you cannot use both Rate Reducer and Depoist Drop together, as they are two separate mortgage products. If you’re struggling to save up a deposit, Deposit Drop could be the right option for you. But if you’re worried about affording the monthly payments, using Rate Reducer to get a lower rate could be the right choice.

Get a free personalised mortgage recommendation

There’s so much innovation in mortgages, but it can be difficult to know which scheme to go for, and if you’re eligible for it. Our smart tech does the thinking for you. When you create a free Tembo recommendation, we’ll compare your eligibility to thousands of mortgage products and budget-boosting schemes, including Own New. So you can see all the ways you could get on the ladder sooner.

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* Based on 25 year mortgage term, 65% LTV with 4.79% interest rate vs 60% LTV with 0.99% interest rate