arrowright roundtick plus plus house 66 . 7 % cornercurve

New Build Mortgages- A Guide

All you need to know about getting a new build mortgage

100,000+ customers

We've helped over 100,000 people (and counting!) get the right advice

Whole of market brokers

We only work with brokers who have access to the whole of market

Our service is Free

We don't charge a fee, your broker may charge once successful

How do we get paid? We work on a success-based model with the advisors. This sets us apart from many other introducers who are geared around selling your enquiry for an upfront fee. Only when the advisors successfully get your mortgage approved do they make commission, and it is only then that they share some of this with us. X

  • Home
  • New Build Mortgages – A Guide

We get a lot of enquiries from customers looking to arrange new build mortgages. Since this is such a popular topic, we’ve put together this comprehensive guide to address some of the main questions that tend to come up in these discussions.

Mortgages for new builds have a reputation for being difficult to arrange, but, at the time of writing, a recent rise in the number of new homes being built has led to increased demand for these products, and lenders are starting to take note. With the right guidance from an expert advisor, you should be able to secure a suitable and competitive deal for the new build house or flat you’ve set your sights on.    

In this article, we will explore:

OMA Accredited Advisors

Brokers must graduate from our official LIBF*** approved accreditation

Advice from the Whole Market

Specialists must have access to all UK lenders to work with us

Our service is 100% free

We don't charge a fee, your broker may charge once successful

Over 100,000 Customers

We've helped over 100,000 people get the right advice

Your data is Safe

OMA is GDPR ready and fully encrypted

Hundreds of 5 Star Reviews

Heartwarming stories on Feefo

UK new build mortgages FAQ:

If you’d like to speak to an advisor with specialist knowledge of the new build mortgage sector with no obligation or fee, give us a call on 0808 189 2301 or leave us a message and we’ll soon be in touch to discuss your purchase plans to help us find the most suitable advisor in your specific circumstances. All of the advisors we work with have access to the whole market, and are ideally placed to assist you.


What is a new build mortgage?

Each lender will have its own definition of a new build mortgage, but we’ll use it in this article to mean any mortgage taken out on a newly-built property (meaning usually within the last 12 months) that has not been owned and occupied by a previous owner.

It may in some cases refer to a mortgage that is taken out before construction on the property has been fully completed, but this won’t always be the case.

Don’t confuse new build mortgages with a mortgage to build a new house, which is related to self build homes rather than newly-constructed properties and is therefore an entirely type of product.


Is it harder to get a mortgage on a new build?

It’s fair to say that getting a mortgage for a new build can occasionally take longer and be more complicated than taking one out on a more standard property, and you might  have a more limited choice of lenders: while all providers take a slightly different view on new builds, some prefer to steer clear of them altogether.

This is for a variety of reasons, but perhaps the biggest concern for mortgage providers is that these properties can be difficult to value: buyers are seen to be paying a ‘premium’ for a brand new home, which will usually drop when the property changes hands – but the exact amount of value it loses (if any) can be highly unpredictable.

Added to this, when buying a brand new property you are more likely to be benefiting from a scheme such as Help to Buy, or from a financial incentive offered by the developer. Both can add further complexity to your purchase, as you may already be limited to a specific set of lenders that are compatible with those schemes.

As a result, mortgages on new builds can work out a bit more expensive, often with higher interest rates and bigger deposits required. This will be further compounded by any other factors that may affect resale value, such as construction type and location, as well as how closely you meet the lender’s ideal eligibility criteria as a borrower.

If you have your sights set on a new build and want to know what mortgage products are available to you in your specific circumstances, don’t hesitate to give us a call on 0808 189 2301 or submit an enquiry here, and we’ll be happy to put you in touch with an appropriate advisor.


When to apply for a mortgage on a new build

It’s fairly common for buyers to commit to purchasing properties that are not yet completed, and building projects frequently over-run. This can present some challenges when considering the timing of your application, as applying too early could result in your mortgage offer expiring, potentially leaving you with sunk costs.

If you think that building issues may cause your timescale to slip, it’s therefore really important to check the validity period before you commit to a particular product. In some cases a lender may agree to extend an offer, but this is not guaranteed.


New build mortgage 9 months validity

Most standard mortgage offers are valid for six months, but some products may have longer validity periods. A few lenders have now introduced products specifically tailored for buyers in the new build market, with validity periods of 9 months or more from the date the offer is made, which may give you additional peace of mind.

Speak to a specialist mortgage advisor if you are concerned about the timing of your application, as they have handled many such transactions before. If you’d like us to put you in touch with an advisor with particular experience of new builds, don’t hesitate to call us on 0808 189 2301 or drop us a line, here.


Mortgages for new build homes: houses vs flats

It’s worth bearing in mind that most lenders apply different rules depending on whether the home you wish to purchase is a house or a flat, so you’ll need to take distinction this into account when considering any general advice on mortgages for new build properties.


Mortgages on new build houses

Lenders tend to offer more generous Loan to Value (LTV) ratios on houses than on flats, and this is as true for new build houses as it is for houses of other types. You can therefore usually secure a mortgage on a new build house with a smaller deposit than is typically  required for a mortgage on a new build flat.

However, the LTV on a new build house will still generally  be lower than that of a standard house, and most lenders will not go above 85%, which equates to a 15% minimum deposit.


Mortgages on new build flats

Mortgages on flats of all types tend to require higher deposits when compared with houses, and this rule of thumb applies to new builds, too.

A typical new build flat mortgage LTV comes in at around 80% or less, so you’ll need to be able to stump up at least a 20% deposit. However this may be mitigated by a schemes that you may be eligible for such as Help To Buy, which is used to cover part of your deposit.


What deposit do I need for a new build mortgage?

As mentioned above, the deposit required to get a mortgage on a new build house will usually be at least 15% (85% LTV) and at least 20% (80% LTV) on a new build flat, unless you’re using Help to Buy. This compares with a typical minimum deposit range of around 5% to 15% on a standard residential mortgage.

All of the figures quoted could be even higher if you are perceived to be a higher-risk borrower (if you have a history of bad credit, for example) and/or if the property you are buying has any quirks that are likely to affect potential resale value above and beyond the fact of it being a new build.

Don’t forget that voluntarily putting down a higher deposit than the required minimum could save you a lot of money in the long run, as this can unlock more favourable interest rates by reducing the size of the mortgage, which in turn leads to lower monthly repayments.


What mortgage can I afford to take out on a new build?

Mortgage providers vary in their levels of generosity, with some lenders willing to offer larger mortgages than their competitors . However there are some general rules of thumb when it comes to calculating affordability, and this can give you a useful estimate before you get into more detailed discussions with a specific provider.

A typical affordability calculation is 4.5 x your salary, so if you earn £50,000 per year, most lenders will allow you to take out a mortgage of £200,000. However, some other lenders will cap at 5 x your income which would take you to £250,000, and a few will go up to 6 x in the right circumstances, taking you to £300,000. Since lenders tend to apply stricter rules to new builds however, these larger mortgages will be harder to come by.


Can I get a mortgage on a new build if I’m self employed?

With the rise in self-employment and contract work, it’s important to remember that ‘income’ can mean different things to different people – and this includes mortgage providers. Some will only take employed income into account, while others accept self-employed, contract or other income types.

You can speak to an expert about which products to apply for if your income is from self employment or other ‘non standard’ income: give us a call on 0808 189 2301 and we’ll be happy to put you in touch with one of the new build brokers we work with. For more advice on working out how much you can afford to borrow, take a look at our affordability section, here.


How to get a mortgage on a new build

The new build mortgage application process can involve a bit more planning due to timing and other issues, and one lender can take quite a different view of these properties to the next. To kickstart your application and to help you reach the best possible deals, we recommend working with a broker with experience in arranging mortgages for new builds.

The advisors we work with are ideally placed to assist you in finding and arranging your new build mortgage, as they have access to the entire market, including specialist products that aren’t available direct to you as a consumer. We select only the best performing and most highly rated brokers to work with us, and our team will ensure you are matched with a broker that suits your requirements and circumstances.

If you’d like to find out more about how we can help find the right mortgage for you, call us on 0808 189 2301 or send us a message. We don’t charge a fee for this service, and your credit record won’t be affected unless you choose to proceed with an application.


New build mortgage eligibility criteria

You may be wondering – particularly if you’re a first-time buyer – if you as an individual will qualify for a mortgage on new build property.

To get an idea of your suitability as a borrower, you’ll need to consider several factors, but in particular:

  • How much you can afford to put down as a deposit
  • Your income (type and frequency, as well as the amount)
  • Your employment type, and how long you’ve been in this employment
  • Your credit history
  • Your age

Each lender will have its own idea of what the ‘ideal’ borrower looks like, and will assess your suitability against these criteria: they will then choose whether to make you an offer or not based on how well you come out of their assessment. This will naturally also apply to any joint borrowers who will share responsibility for paying the mortgage.

While having a clean credit record and a secure and steady income will certainly increase your appeal to any lender, they tend to differ on the finer points such as their attitudes towards self employed borrowers and what (if any) types of bad credit they are willing to accept.

Being turned down by one lender doesn’t have to mean the end of your purchase – make sure you seek an all-of-market broker to increase your chances of finding the right deal if you’re in this situation.


Can I get a new build mortgage on a unique property?

Unusual properties, including eco-homes and other non-standard construction types can affect mortgage providers’ willingness to lend to you, and is likely to add further complexity when seeking to mortgage new build property. Non-standard construction shouldn’t in itself be seen as a barrier, but it will certainly mean access to fewer lenders.

Most new build homes are of standard construction, but there is a growing trend for timber frame properties, which some lenders may consider to be a turn-off.

Many new build flats are often classed as ‘high rise’ which can also put them in the non-standard category. So what else should you look out for when assessing the construction of your new home?

If you’re planning to buy an ‘eco-home’ there are specialist lenders who will offer you a mortgage and the expert advisors we work with know who they are, so why not give us a call today?


What is non-standard construction?

By ‘non standard construction’ we mean a home that is built from less commonly-used materials, or using methods that have been identified as presenting a higher risk for resale for a variety of reasons.

It can also apply to homes situated in a particular setting, eg. above commercial premises. You can read about this topic in more depth, here.


Can I get a new build mortgage with credit issues?

Personal credit history is another factor that will inevitably be taken into account when a lender assesses your application for a mortgage on a new build, and the more instances of bad credit you have on your file and the more serious they are in nature, the harder it can be to find a willing lender.

Every lender is different in terms of what they will and won’t accept, so while some won’t consider applicants with anything but a spotless record, others will accept even recent and severe credit issues in the right circumstances.

If you have any questions about how your credit history could affect your chances of taking out a mortgage on a new build, feel free to make an enquiry and we’ll put you in touch with one of the specialist advisors we work with. You can also find out more about this topic in our section on bad credit mortgages.


FAQ: New build mortgages UK

Can I get a new build mortgage after retirement?

New builds can make great retirement properties as they are generally easier to maintain than older properties. If you’re keen to take out a mortgage on a shiny new home later in life then this should certainly be possible with the right type of product, such as a Retirement Interest Only mortgage. Speak to an expert if you need advice on how to finance a property purchase after retirement.


Can I get a mortgage for new build buy-to-let property?

It can be difficult to take out a buy to let (BTL) mortgage on a new build, and many lenders won’t allow BTL unless a property has been inhabited for at least six months. This is because new builds have historically been exploited in property scams, and recent housing legislation makes it harder to purchase new property for profit.

It’s also harder for lenders to establish facts relevant to your application, such as the amount of rental income you can expect as well as resale value on a brand new home. So if you do find a lender that is willing to offer BTL on a new build you can expect to pay hefty interest rates as well as a large deposit. We recommend you speak to an expert for advice, and if you want to find out more about buy to let mortgages head over to our article dedicated to buy to let mortgages.


Can I get a new build mortgage in Scotland?

Yes, you can certainly take out a mortgage on new build property in Scotland under the right circumstances. New build mortgages in Scotland follow the same general principles as they do elsewhere in the UK, i.e. the criteria may be stricter and rates and minimum deposits a little higher, but they are available provided you meet the lender’s requirements.


Can I get a new build mortgage in Northern Ireland?

It should absolutely be possible to take out a new build mortgage in Northern Ireland provided you meet lenders’ criteria. These mortgages are offered on much the same basis as they are elsewhere in the UK, so the advice given throughout this article should apply – however it is worth speaking to a Northern Ireland specific mortgage broker to ensure access to the best deals.


How can I get the best rates on a new build remortgage

Are you the current owner of a new build looking to secure a new mortgage deal before your lender’s SVR kicks in? Many customers ask us ‘can I remortgage a new build property?’ and the answer is usually yes, provided your circumstances haven’t changed in such a way as to affect your eligibility to apply for a new mortgage.

Once you’ve been living in your home for a number of years, the property will no longer be considered a ‘new build’ so you should be able to access a wider range of standard mortgage products, which are likely to have lower interest rates that you can fix for up to 5 years: speak to an all-of-market broker to ensure you get the best deal.


Can I buy a new build as a second home?

It should certainly be possible to take out a mortgage on a new build as a second home in the right circumstances, as long as you don’t intend to immediately rent it out and are buying it for personal use, as this would place it in the ‘buy to let’ category.

Second homes require larger deposits and tend to have higher rates because the lender needs to consider you existing mortgage debt, but you may also have more financing options as a current homeowner. Take a look at our guide to mortgages for second homes here to get a flavour of the type of products that are available.


Can I port my existing mortgage to a new build property?

Porting a mortgage to a new build is possible, but you would need the lender to approve the transaction. To see if this is possible, you’ll need the right advice. Talk to one of the new build mortgage experts we work with today.


Where can I find a new build mortgage calculator?

To get a ballpark figure for the cost of repayments on your new build mortgage, you could try using our mortgage calculator which can be found here. You’ll need to have a good idea of your expected deposit amount, interest rate and the amount you intend to  borrow in order to use this tool.

Please note, we don’t currently have a dedicated help to buy new build mortgage calculator as this is a fairly specific set of circumstances, and requires a more nuanced view than a calculator can provide. Always speak to an expert for the most accurate illustration.


Speak to an expert on new build mortgages

If you’re in the market for a mortgage on a new build and would like to speak to an expert for the right advice, don’t hesitate to get in touch with us by calling 0808 189 2301 or by sending us a message here with a brief outline of your requirements and circumstances.

We’ll then be happy to find the right broker for your new build mortgage, and will not charge a fee for this service.

Online Mortgage Advisor offers access to accredited brokers with a whole-of-market view and extensive knowledge of the best lenders to approach as they successfully arrange mortgages for clients on a regular basis, in fact our customers consistently rate us 5 stars on Feefo for service and quality of advice.

New Build Mortgage Information

Looking for specialist advice? Read through our articles about the different types of new build mortgages available and how best to prepare yourself to find the right mortgage for you

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.