Are you dreaming of owning your own home or moving into something a little larger, but feeling overwhelmed by high mortgage rates? The great news is that the Own New Rate Reducer scheme is offering super low interest rates to make those dreams a reality.
A fantastic opportunity for first-time buyers and existing homeowners, the Rate Reducer scheme will make home ownership more affordable and accessible than ever before. Let’s explain in more detail…
- What is the Own New Rate Reducer?
- How does the Rate Reducer scheme work?
- Are you eligible for the Rate Reducer scheme?
- Which mortgage lenders are participating in the Rate Reducer scheme?
- Which developers are participating in the Rate Reducer scheme?
- What mortgage rates can you expect with the Rate Reducer scheme?
- How do you apply for the Rate Reducer scheme?
What is the Own New Rate Reducer?
As the name suggests, Rate Reducer is a new mortgage scheme that enables you to get a reduced rate on your mortgage, even as low as below 1%. The scheme enables you to reduce your mortgage interest rate by up to 4% and is available for both new build houses and flats.
Launched in 2024 by a finance firm called Own New, the Rate Reducer scheme makes it easier for you to buy a new build home with a more affordable mortgage.
How does the Rate Reducer scheme work?
It’s not uncommon for new home builders to offer incentives to buyers, such as covering the stamp duty costs, throwing in some free house upgrades, or even knocking a little off the asking price. Instead of offering these perks, the budget is allocated towards reducing mortgage payments for the buyer.
For example: If the new-home builder offers a 5% discount on one of its properties, the Rate Reducer would take the discount amount and minus it from the mortgage interest instead.
Are you eligible for the Rate Reducer scheme?
The Rate Reducer scheme is available to anyone looking to purchase a new build property, whether you’re a first-time buyer or already a homeowner.
You are eligible for the Rate Reducer scheme if you are…
- A first-time buyer
- An existing homeowner
- Employed or self-employed
- Able to meet the lender’s affordability criteria
Which mortgage lenders are participating in the Rate Reducer scheme?
Initially, the Rate Reducer scheme launched with Halifax and Virgin Money, however, participating mortgage menders now include Furness Building Society, Perenna, and Gen H.
See the full list of Own New Rate Reducer brokers for more information.
Which developers are participating in the Rate Reducer scheme?
Barratt Homes was the first developer to participate in the Rate Reducer scheme, offering up their fabulous new build homes with competitive mortgage rates. Now, there are more than 150 participating developers across the UK signed up to offer the Rate Reducer scheme, including the likes of Persimmon Homes, Taylor Whimpey, Berkeley Homes, Gleeson Homes, and Bellway Homes.
See the Own New website for the full list of participating developers.
What mortgage rates can you expect with the Rate Reducer scheme?
The mortgage rates you’re able to secure will depend on multiple factors, such as your chosen lender, your deposit amount, and the budget the developer has available for incentives. For instance, if you’ve got a lot of equity, you can expect lower rates, even below 1%.
How long are these lower rates fixed for?
When buying a home under the Rate Reducer scheme, buyers can choose between two and five-year fixed term mortgages, however, this will vary from lender to lender.
What happens after the fixed rate term ends?
Like all good things, the Rate Reducer mortgage will eventually come to an end as it is fixed-term and buyers should be prepared in case their rate increases and monthly payments go up. At the end of your deal, you may switch to the going market rate.
This is why you can expect to go through the regular affordability checks with lenders to ensure you can afford repayments once the reduced rate finishes.
How do you apply for the Rate Reducer scheme?
Applying for the Rate Reducer scheme couldn’t be easier! Follow these simple steps:
- Find your dream home that’s eligible for the scheme
- The builder will then arrange your mortgage with a participating lender
- You’ll be ready and set to buy your new home
Many of our developer partners offer properties that are eligible for the Rate Reducer scheme. Choose from thousands of new build homes for sale across the UK with OnTheMarket.
