Find the right new build mortgage for you

It can be harder to get a mortgage on a new build property because lenders can see these mortgages as more risky. This is because there is a higher chance of the property value falling in the first few years due to the "new build premium" ending. Some lenders may only offer new build mortgages for borrowers with a 10-15% deposit, or more. There is only a limited selection of lenders who accept applicants with 5% deposits for new build mortgages, although this can be possible through schemes like Depoist Unlock. Because there are fewer lenders to choose from, this can mean you will be charged a higher interest rate for a new build than you would on an older property. But some lenders offer better rates or cashback for energy-efficient homes, which new builds tend to be.

Mortgage lenders are often stricter on the amount they are willing to lend to borrowers who want to purchase a new build property. This is because new builds have a higher chance of going down in value in the early years, once the "new build premium" has worn off. Working with an expert mortgage broker can help you ensure you apply to a lender that does offer mortgages for new builds.

Typically, you would need 10-15% deposit to purchase a new build property, sometimes more. There is only a small selection of lenders who accept applicants with 5% deposits for new build homes, although this is usually through schemes like Depoist Unlock.

For a new build property, you can typically borrow the same amount you would be able to for an existing property because this is based on your household income. Normally, lenders will offer to lend you 4-4.5x your household income for a mortgage, although some people may be able to borrow more than this. If you purchase a new build through a shared ownership scheme, you will only need a mortgage that is enough to cover the share of the property you're buying after your deposit. Together, the mortgage and your deposit would make up between 10-75% of the full property value. You then pay rent on the remaining share you don't own to your provider.

Although new builds can be more expensive, you often benefit from personalisation - you can usually choose things like flooring, doors and cabinets to match your style, ready for when you move in. The home is also completely new, and often more energy-efficient than existing properties, which can help keep your energy bills low. In the first few years, new builds can go down in value because their "newness" has worn off, but over the long term they can be just as good an investment as an older home. Ultimately, it's up to you and your personal circumstances as to whether a new build is worth it.