Buying a newly built home can mean lower running costs, less renovation work and no onward property chain. However, new-build mortgages may involve stricter deposit requirements and tighter completion deadlines.
Mortgage lenders often apply different rules to new-build houses and flats. If you are buying off-plan, construction delays could push completion beyond your mortgage offer’s expiry date.
Before reserving, check the deposit rules and expected build date. Planning ahead can help you choose the right lender and avoid delays later.
What to check before reserving
Know your deposit early
Check the lender’s loan-to-value limit for the property before paying a reservation fee.
Protect your mortgage offer
Match the offer period to the expected build date and ask how extensions work.
Declare developer incentives
Inform your broker about cashback, paid fees or upgrades from the developer.
Confirm the warranty
Check the lender accepts the property’s warranty before you commit.
Check what you could borrow
Get an Agreement in Principle before reserving a home, so you can move forward with a clearer budget.
What makes a new-build mortgage different?
Applying for a new-build mortgage involves the same affordability and credit checks as any other home purchase. Like normal, your lender will look at your income, regular spending, deposit, credit history and the property’s value.
Mortgages for new builds may need extra property checks, especially for flats. Some lenders set lower loan-to-value limits. Others restrict certain developments or require a warranty they accept.
How much deposit will you need?
The deposit you need for a new-build depends on the lender, property type and purchase price. Some mortgage lenders accept 5% on certain houses, although new-build flats may require a larger deposit.
For a £300,000 new-build property:
Deposit
Amount needed
Mortgage required
Loan-to-value (LTV)
5%
£15,000
£285,000
95%
10%
£30,000
£270,000
90%
15%
£45,000
£255,000
85%
A larger deposit could give you access to more deals and help you get a lower interest rate. However, the lender will base its offer on the property’s value.
If the lender values the home below the agreed price, you may need a bigger deposit. You could also ask the developer to lower the price.
See how your deposit affects your LTV →
What if the build is delayed?
When buying off-plan, you may exchange contracts several months before the home is ready. On top of that, construction delays could push completion beyond your mortgage offer’s expiry date.
Before exchanging contracts, check that your mortgage offer covers the expected completion date. Some lenders give buyers of new-build properties more time, while others may agree to an extension.
Without an extension, you may need to reapply and could lose your original mortgage rate.
Will developer incentives affect your mortgage?
A property developer may offer cashback, a deposit contribution, paid legal fees or upgrades. Although developer incentives can reduce your upfront costs, tell your mortgage broker about each one before reserving.
Each lender sets its own limits and may reduce how much you can borrow if the total incentive is too high.
Before accepting an incentive, ask whether the developer could reduce the purchase price instead. Free upgrades may look attractive, but a lower price could offer better long-term value.
Can a new-build deposit scheme help?
Some home-buying schemes could make a new-build more affordable, depending on the property and your circumstances.
With Own New Rate Reducer, a housebuilder incentive lowers the mortgage rate during the initial deal. You still need your own deposit and must meet the lender’s affordability rules.
Deposit Unlock previously helped buyers secure 95% mortgages on participating new-builds. The scheme closed to new completions in April 2026. Alternatively, shared ownership could offer another route if buying outright remains beyond your budget.
How do you apply for a new-build mortgage?
When arranging a mortgage on a new-build, start by checking your budget and getting an Agreement in Principle. Before reserving, share the property type, deposit, expected completion date and any developer incentives with your broker.
After reserving, you can submit the full mortgage application while your solicitor reviews the contract. The lender will then arrange a property valuation.
New-build mortgage rates and LTV limits vary by lender, so look beyond the headline rate. Compare product fees, offer length, extension options and early repayment charges.
A new-build mortgage broker can compare lenders based on your property, deposit and expected completion date.
How Muttuo Mortgages can help
New-build criteria vary, so Muttuo compares options from more than 100 lenders and guides you through the mortgage process.
Muttuo Mortgages can help you:
✓
compare mortgage rates, fees and property criteria
✓
check your deposit and likely borrowing range
✓
match the offer period to the expected completion date
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prepare and manage your application through to offer
Alongside mortgage advice, consider arranging an independent snagging survey and check exactly what the new-build warranty covers. Energy-efficient homes may also qualify for selected green mortgages, depending on the lender’s criteria.
Ready to compare your options?
Speak to Muttuo for help finding a lender that accepts your property, deposit and expected timeline.
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