Thinking about buying a brand-new home that no one has lived in before? New build homes are exciting — fresh paint, modern features, and energy-efficient design. But when it comes to mortgages for new build properties, there are a few important things you need to understand.
Let’s break everything down in simple terms so you know exactly what to expect.
What is a New Build Home?
A new build home is a property that has been newly built in the last two years and has never been lived in before.
You can buy:
- A completed new build, or
- An off-plan home (still under construction or not yet started)
Sometimes, even a property that has been heavily renovated to create a new living space may count as a new build.
What is a New Build Mortgage?
A new build mortgage is a loan to help you buy a newly constructed property. It works similarly to a normal mortgage but can have a few extra conditions. For example:
- Bigger deposits
- Shorter mortgage offer validity
- Stricter checks by lenders
Benefits of Buying a New Build Home
Before we jump into mortgages, let’s look at the perks of buying a brand-new home.
🎨 Customization
If you’re buying off-plan, you may get to choose:
- Kitchen and bathroom designs
- Flooring
- Wall colors
- Doors, windows, and more
🛡 Warranty Protection
Most new builds come with a 10-year warranty, which means:
- If something goes wrong structurally, you’re protected.
- Covered by The Consumer Code for Home Builders
🌱 Energy Efficiency
- 80% of new homes have an EPC rating of A or B
- You’ll save money on energy bills
- Better for the environment
🔗 Chain-Free Purchase
- No waiting for the seller to buy another house
- Especially helpful for first-time buyers
New Build Mortgage Criteria
Lenders will check your:
- Income
- Credit history
- Spending habits
- Current debts
- Deposit amount
For new builds, requirements are often stricter.
| Mortgage Type | Typical Deposit Required |
|---|---|
| New Build House | 10%–15% |
| New Build Flat | 15%–25% |
| With Govt. Scheme | As low as 5% |
Am I Eligible for a New Build Mortgage?
If you:
- Have a stable job
- Maintain a good credit score
- Can save the minimum deposit
…then yes, you can apply!
Lenders might be a bit more selective, so it’s best to be in strong financial shape.
How Much Deposit Do I Need?
Usually, you’ll need at least a 10% deposit. But some lenders might ask for 15%–25%, especially for flats.
Example:
- Home price: £200,000
- 10% deposit: £20,000
- 25% deposit: £50,000
🏠 Tip:
The larger your deposit, the lower your mortgage interest rate may be.
How Long Does a Mortgage Offer Last for New Builds?
Most mortgage offers for new builds last 6 to 9 months, sometimes up to 12 months.
This gives builders time to finish construction, especially if you’re buying off-plan.
Be Careful of Delays
If your offer expires before the home is ready:
- You may need to reapply
- Your financial situation might have changed
- Interest rates could go up
Always ask your lender if they allow extensions.
Buying Schemes That Can Help
Several government-backed or builder-supported schemes can make new build homes more affordable.
🔹 Deposit Unlock
- Just 5% deposit needed
- Backed by major UK builders
- Good for first-time buyers and movers
🔹 New Build Boost (by Gen H)
- 80% mortgage + 15% equity loan
- Equity loan is interest-free
- Only 5% deposit required
- You own 100% of the home
🔹 Shared Ownership
- Buy 25%–75% of the property
- Pay rent on the rest
- Deposit only for your share
- You can buy more shares over time
🔹 Help to Build
- For self-builders
- Government gives up to 20% equity loan
- Up to 40% if in London
- Only 5% deposit needed
How to Get a New Build Mortgage – Step by Step
- Check Your Finances
Make sure your income, credit score, and savings are strong. - Search for New Builds
Look for homes that match your budget and lender requirements. - Use a Mortgage Calculator
Understand how much you can borrow. - Speak to a Broker or Lender
They’ll help you find the best deal. - Choose a Buying Scheme (if needed)
Decide if Deposit Unlock or Shared Ownership works for you. - Reserve Your New Build
Pay the reservation fee to the builder. - Hire a Conveyancer
A solicitor will handle the legal paperwork. - Apply for Your Mortgage
Usually within 28 days of reservation. - Property Valuation & Survey
The lender will check the home’s value. - Exchange Contracts
Your mortgage is approved and your home is secured. - Completion Day!
Funds are released and you get the keys.
Potential Pitfalls and How to Avoid Them
| Pitfall | How to Avoid It |
|---|---|
| Construction delays | Choose a lender with longer offer period |
| Offer expires before completion | Request an extension early |
| Credit score drops | Avoid big purchases or new debts |
| Interest rates rise | Lock in a rate early if possible |
Frequently Asked Questions
Q: Can I get a new build mortgage with poor credit?
A: It’s harder, but not impossible. Speak to a broker for specialist lenders.
Q: Are new builds more expensive?
A: Often yes, but you save in the long run due to energy efficiency and low repairs.
Q: How fast can I move into a new build?
A: Once completed and contracts are exchanged, you can move in within days!
Final Thoughts
Buying a new build home is a fantastic option, especially if you want a modern, energy-efficient property that’s easy to move into. But getting a new build mortgage means being prepared for stricter deposit rules, deadlines, and possible construction delays.
Make sure to research well, use helpful schemes, and get expert advice along the way.
For more helpful property advice and tips, visit HousingMarketNews – your trusted guide for smarter home buying!
