The scheme, which launched in February 2024, allows home buyers access to rock-bottom mortgage rates during their mortgage's initial term.
Depending on their lender's criteria, buyers can choose to spread the benefit over the first two or five years., one of the first lenders to sign up to Own New's Rate Reducer, says for a new home worth £300,000, the introductory 2-year mortgage rate of 4.79% with a £995 fee at 65% LTV will be cut to 0.99% at 60% LTV with a £495 fee.
Commenting on the Own New Rate Reducer product David Hollingworth, Associate Director at L&C Mortgages said: "Buyers will no doubt have paused their plans due to higher mortgage rates pushing up their monthly payments."Borrowers will have to meet lender affordability tests as normal but it will also be important for them to plan ahead.
When you choose your property, the developer will agree to contribute 3% or 5% of the purchase price. The number one perk of this mortgage scheme is that it brings substantially lower monthly mortgage payments over a fixed period of time. You'll also get a more limited choice of properties eligible for the scheme, and you might not get the headline rate of 0.99% if you can't afford a 40% deposit.Skipton Building Society launched its Track Record 100% mortgage