{"id":1376,"date":"2024-03-01T10:40:33","date_gmt":"2024-03-01T10:40:33","guid":{"rendered":"https:\/\/www.redstarwealth.co.uk\/blog\/?p=1376"},"modified":"2024-03-01T10:40:33","modified_gmt":"2024-03-01T10:40:33","slug":"new-sub-1-mortgage-launched-for-new-build-buyers","status":"publish","type":"post","link":"https:\/\/www.redstarwealth.co.uk\/blog\/new-sub-1-mortgage-launched-for-new-build-buyers\/","title":{"rendered":"New Sub-1% Mortgage Launched for New-Build Buyers"},"content":{"rendered":"

Earlier this week, a new sub-1% mortgage was launched for new build buyers.<\/p>\n

Own New\u2019s Rate Reducer<\/h2>\n

As of Monday, Virgin Money and Halifax are offering mortgages with rates potentially below 1% for those with high deposits or equity who are buying new build homes.<\/p>\n

These new low rates come from Own New, who teamed up with housebuilder, Barratt Developments to introduce their \u2018Rate Reducer\u2019 scheme.<\/p>\n

More housebuilders are due to join the scheme this coming Monday, with more mortgage providers also set to offer mortgages through Own New.<\/p>\n

How Does it Work?<\/h2>\n

The Rate Reducer works by using incentive budgets offered by housebuilders to customers to reduce their monthly mortgage payments over a fixed term. Buyers can choose to spread the incentive over the first 2 or 5 years of the mortgage term depending on their lender\u2019s criteria.<\/p>\n

These mortgages will still require lenders to carry out affordability assessments to ensure that borrowers will still be able to meet repayments once this fixed term benefit ends and they face higher interest rates.<\/p>\n

 <\/p>\n

\"\"
-Map from ‘Own New’<\/a> showing properties eligible for a Rate Reducer mortgage<\/figcaption><\/figure>\n

What Have People Had to Say?<\/h2>\n

There appear to be mixed opinions when it comes to these new low rates, with some commentators noting that the Rate Reducer will help make mortgages more affordable, stepping in to fill the gap left by Help to Buy\u2026 whilst others believe that it could lead to rises in house prices and could leave homebuyers worse off.<\/p>\n

\n

\u201cOur ethos is to make home ownership and mortgage lending in this country open to more people and we are confident that the launch of the Own New Rate Reducer will achieve that\u201d<\/em><\/strong> \u2013 Elliot Darcy, founder of One New<\/em><\/p>\n<\/blockquote>\n

\n

\u201cThis will help target one of the key barriers for many and give buyers more breathing space in their monthly payments\u201d <\/strong>\u2013 David Hollingworth, associate director at L&C Mortgages<\/em><\/p>\n<\/blockquote>\n

\n

\u201cThis product gives customers more choice in the way they can benefit from builder incentives and is especially helpful to those who want to see a lower initial mortgage payment as they get set up in their new home.\u201d <\/strong>\u00a0– Amanda Bryden, head of Halifax Intermediaries<\/em><\/p>\n<\/blockquote>\n

\n

\u201cSince the demise of Help to Buy, the market has been crying out for a scheme to help get people onto the property ladder.\u201d<\/strong> \u2013 Terry Higgins, managing director at The New Homes Group<\/em><\/p>\n<\/blockquote>\n

\n

\u201cthis is a dangerous scheme in that buyers will get used to the lower payments and when that initial product ends they will be faced with a large increase in their payments.<\/strong><\/em><\/p>\n

Ultimately, though, like the Help to Buy scheme that preceded it, this scheme will see developers just increasing their house prices leaving the potential buyers no better off at all, whilst also sacrificing the other incentives they would have been able to secure\u201d <\/strong>– Stephen Perkins, MD at Yellow Brick Mortgages<\/em><\/p>\n<\/blockquote>\n

\n

\u201cWithout a doubt developers will use these affordable mortgages to increase house prices, meaning a premium will be paid for own new stock, and the payment shock at the end of the product will be enormous.<\/strong><\/em><\/p>\n

Will the buyer be advised correctly? Doubtful. This has disaster written all over it\u201d <\/strong>\u2013 Matthew Jackson, director at Mint FS<\/em><\/p>\n

 <\/p><\/blockquote>\n

Sources:\u00a0<\/strong><\/p>\n

Sky News<\/a><\/p>\n

What Mortgage<\/a><\/p>\n

FT Adviser<\/a><\/p>\n

The Intermediary<\/a><\/p>\n

Own New<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Earlier this week, a new sub-1% mortgage was launched for new build buyers. Own New\u2019s Rate Reducer As of Monday, Virgin Money and Halifax are offering mortgages with rates potentially below 1% for those with high deposits or equity who are buying new build homes. These new low rates come from Own New, who teamed […]<\/p>\n","protected":false},"author":7,"featured_media":1380,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false},"categories":[1],"tags":[1096,1095,1098,1093,1091,1090,1088,1089,1099,44,97,482,972,1097,1086,1094,1087,1092],"yoast_head":"\nNew Sub-1% Mortgage Launched for New-Build Buyers - Red Star Wealth<\/title>\n<meta name=\"description\" content=\"We discuss the Rate Reducer mortgage introduced earlier this week by Own New which sees mortgage rates below 1% offered to new-build buyers\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.redstarwealth.co.uk\/blog\/new-sub-1-mortgage-launched-for-new-build-buyers\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Sub-1% Mortgage Launched for New-Build Buyers - 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