Best new build mortgage deals
Mortgage options tailored for newly built homes
Extended offer periods for off-plan purchases
Support for first-time buyers and home movers
Your new build mortgage
If you’re buying a newly built home, you may need a new build mortgage. These mortgages work in a similar way to standard residential mortgages, but they often come with a few extras to suit the way new homes are sold.
Some lenders offer longer mortgage offers, ideal for off-plan purchases, and others may accept smaller deposits for certain types of new builds.
What is a new build mortgage?
A new build property is usually one that has been built within the past two years and not sold during that period. If you’re buying a property which is in the process of being built, or where work hasn’t yet started on the land, it’s known as buying “off plan”.
If you’re buying off-plan, you may need a lender who’ll keep the mortgage offer open for several months.
Most mortgage lenders will have different rules for new builds, including limits on how much they’ll lend or what deposit they’ll accept.
If you’re considering a new home build mortgage, L&C can advise exactly which deals you’ll be eligible for and support you through the application process.
Why choose a new build mortgage?
Benefits of new build homes:
- You can often choose the fixtures and fittings you want
- Usually come with a warranty to protect against defects in building work
- Tend to be more energy-efficient than older properties
- Generally in better condition than older homes, so you’re less likely to face repair or maintenance costs
- No previous owner means you might avoid being in a property chain which can make the buying process quicker and reduce the chance of delays or complications
Drawbacks of new build homes:
- Often more expensive than similar older properties
- You may have to pay a reservation fee when buying off plan – and you could lose this if you back out
- Building work delays can still hold up your move, even if there’s no property chain
- Mortgage lenders may be stricter with how much they’re willing to lend on new builds
- Lenders may see the property as a higher risk if its value drops after purchase just because it’s no longer ‘new’
How new build mortgages work
The mortgage itself works like any standard residential mortgage, you’ll borrow a set amount and repay it monthly.
But there are a few differences when buying a new build:
- Some lenders limit the loan-to-value (LTV), meaning you might need a bigger deposit (especially for new build flats)
- Offers may need to be valid for longer than usual (up to 6–9 months)
- Some developers offer incentives (like cashback or covering legal fees), which lenders may take into account when valuing the property
The timing is also important, especially if you’re buying off plan. A mortgage offer from most lenders will be valid for six months and this could expire before your home is built. So check if you can get a longer validity period if your house build is facing delays. Otherwise you will have to reapply for a mortgage, with no guarantee that you’ll get the same new build mortgage rates again.
Who can get a new build mortgage?
You’ll still need to meet all the usual mortgage criteria:
- Stable income
- Good credit history
- Affordable monthly payments
But for new build properties, lenders may also look at:
- The type of property (house vs flat)
- Whether you're buying off-plan
- Any incentives or discounts from the developer
If you’re a first-time buyer or using a scheme like shared ownership, your options might be more limited, but we can help you find lenders that support these.
Lenders may also ask for a larger deposit for new build properties – typically at least 10% of the purchase price. Some new build mortgages may require a smaller deposit but it will depend on the property and your circumstances.
How to find the best new build mortgage deals
Not all lenders treat new build homes the same way, so it’s important to compare what’s out there.
We work with over 90 lenders, including those that offer longer offer periods or smaller deposit requirements for new builds. Our advisers can help you find the right mortgage based on your deposit, timeline and budget.
Some lenders may offer fixed or tracker deals, and we’ll explain the pros and cons of each based on your plans.
Making repayments on a new build mortgage
Your repayments will depend on how much you borrow, the mortgage type, and the term you choose. Most people go for a repayment mortgage with fixed monthly payments.
Bear in mind that if you're buying off-plan, you won’t start repayments until your mortgage completes (when the home is finished and you get the keys).
Some developers require a reservation fee, and you’ll still need to pay your deposit and legal costs.
You’ll need to apply for a mortgage as soon as you’ve found your new build home and paid a reservation fee to the builder. Don’t hang around as there will often be a 28-day deadline from the point you pay your deposit to exchange contracts. Find out more in our Guide to new build mortgages.
Mortgages for new build homes work in the same way as mortgages for older properties, except lenders may require you to put down a slightly larger deposit. Lenders will also want to know about any incentives you are getting as part of your purchase, such as furnishings or appliances, or contributions towards legal costs or stamp duty.
You’ll start paying your mortgage on the new build property you’ve bought once your property purchase completes. The completion date is usually when the building is finally finished.
It's not necessarily harder to get a mortgage on a new build home, but you may find that options are limited for some new build flats if you have a smaller deposit. That's because new build properties are often seen as riskier by lenders, as there's no precedent to indicate whether the house value will remain stable, increase or decrease over the coming years.
Self build mortgages are slightly different to new build mortgages, and are for people who want to buy land and build their own property, rather than buying a home that's already been built. This type of mortgage can be seen as risky by lenders, and most will want a deposit of at least 25% - sometimes up to 50%. The money is also usually released in stages as the building project develops.
When buying a new build property, you're often given the option of adding extras, such as flooring, fixtures and fittings. This can bring the home more in line with your personal style at a lower cost. However, it's important to be aware that these extras can't usually be rolled into your mortgage. You'll usually pay half of the cost of the extras when you order them, and the other half on completion of the house build.
Apply for a new build mortgage with L&C
We’ve helped thousands of people buy new build homes. Whether you're buying off-plan or ready to move in, we’ll guide you through the whole process.
Use our best buy tables to compare new build mortgage rates, or get started online to see what you might be eligible for.
We don’t charge broker fees and our expert advisers are here to make things simple from day one.
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