New build properties offer modern, energy-efficient living and in many cases access to government-backed schemes that reduce the deposit required. But the mortgage process works differently from buying an existing property — and those differences catch buyers out every year. For more information, see the government new build support schemes.

Why new build mortgages are different

Lenders apply lower maximum loan-to-value (LTV) limits on new builds because new properties often carry a price premium that may not hold immediately on resale. Most lenders cap new build houses at 85 to 90% LTV and new build flats at 75 to 85%, compared to 95% on resale properties. This means you typically need a larger deposit than you would on a second-hand home.

For off-plan purchases — where you reserve before the property is finished — mortgage offers carry expiry dates, usually six to nine months. If the developer overruns that deadline, your offer may lapse and you will need to reapply, potentially on different terms.

The Mortgage Guarantee Scheme

Since July 2025 the government’s permanent Mortgage Guarantee Scheme has allowed eligible buyers to purchase with as little as a 5% deposit on properties up to £600,000. The scheme encourages lenders to offer 95% LTV mortgages by guaranteeing a portion of the loan. It covers repayment mortgages on main residences only — buy-to-let and interest-only products are excluded.

How developer incentives affect your mortgage

Developers often offer paid stamp duty, cashback, or upgraded fixtures as buying incentives. All incentives must be declared to the lender, and how they are treated affects how much you can borrow. Incentives up to 5% of the purchase price are typically ignored — a £15,000 incentive on a £300,000 property has no impact on your mortgage. Incentives between 5% and 10% of the purchase price cause many lenders to reduce the property value used for LTV calculations, effectively increasing the deposit you need. Incentives above 10% will cause most lenders to decline entirely. Always disclose all incentives upfront — omitting them can be treated as mortgage fraud.

New build flats and cladding

Flats in buildings over 11 metres may require an EWS1 certificate confirming the external wall system is safe before a lender will approve a mortgage. Without one, the choice of lenders narrows considerably. We know which lenders are flexible on this requirement and which will not consider the case.

Own New Rate Reducer and Deposit Unlock

Two developer-led schemes worth knowing in 2026 are Own New Rate Reducer, where the developer contributes 3 to 5% of the purchase price to reduce your mortgage interest rate during the initial fixed period, and Deposit Unlock, which allows purchases with a 5% deposit through participating builders and lenders. Availability varies by developer and lender, and not all are on every lender’s panel.