Buying your first home can feel overwhelming, especially when rising interest rates and deposit requirements make the process seem out of reach.
However, new mortgage schemes are helping more buyers step onto the property ladder sooner. One example is the Own New Rate Reducer scheme, which can allow buyers to purchase a new build property with a smaller deposit and lower initial monthly payments.
In this episode of On the Ladder, Sarah Tucker explains how the scheme works and shares a real example of how it helped one first-time buyer secure their home.
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What is the Own New Rate Reducer scheme?
The Own New Rate Reducer scheme is designed to make new build homes more affordable for buyers.
When purchasing a property through a participating housebuilder, the builder makes a financial contribution towards the purchase. This contribution is typically around 3 to 5 percent of the property price.
This support can be split in two ways.
Part of it can increase your deposit.
Part of it can reduce your mortgage interest rate.
Lowering the interest rate during the early years of the mortgage can make monthly payments more manageable, which can be particularly helpful for first-time buyers.
In some situations, buyers may be able to purchase a home with as little as a 3 percent deposit.
A real example of the Rate Reducer in action
Sarah shares the story of a first-time buyer in Glasgow who was hoping to purchase a modern three-bedroom home priced at £295,000.
Although he had saved for a deposit, additional costs such as stamp duty and solicitor fees meant his available deposit had reduced to around 3 percent of the purchase price.
He also faced another challenge because his visa status limited some mortgage options, which is common for international professionals working in the UK.
After reviewing his financial situation, Sarah structured a solution using the Own New Rate Reducer scheme.
The builder provided a 5 percent contribution which was split into two parts. Two percent was added to the deposit and three percent was used to reduce the mortgage interest rate.
This allowed the buyer to purchase the property with a 3 percent deposit and secure monthly mortgage payments of around £1,324.
As a result, he was able to buy a home close to the hospital where he works and in an area with excellent schools without stretching his finances beyond what felt comfortable.
Could the Rate Reducer help you?
Schemes like the Own New Rate Reducer are designed to make home ownership more accessible by lowering both deposit requirements and early mortgage payments.
They may be helpful for first-time buyers, families moving home, buyers purchasing new build properties, or professionals with more complex financial situations.
If you are considering a new build property, it may be worth exploring whether this scheme is available through the builder.
You can also use the Rate Reducer calculator on the Own New website to estimate how much you could potentially save on monthly repayments.
Speaking with a qualified mortgage adviser can help you understand whether this type of scheme is suitable for your personal circumstances.
Full transcript
Welcome to On the Ladder, the series that helps you understand everything you need to know about buying your first home. I’m Sarah Tucker, and in every episode I’m going to be guiding you through a different stage of the process. This is On the Ladder, and you’re about to take the next step.
Today I want to tell you about a real success story. One that shows how Own New Rate Reducer is helping people step onto the property ladder sooner with only a 3 percent deposit and lower monthly payments.
Buying a home can feel daunting, especially for first-time buyers facing rising interest rates and deposit challenges. But with the right guidance and the right mortgage solution, those dreams really can become reality.
So what is Rate Reducer and how does it work?
Own New’s Rate Reducer is a scheme designed to make new build homes more affordable from day one. When you buy a new build home through a participating builder, that builder makes a financial contribution. This is typically around 3 to 5 percent of the property’s price.
Part of that contribution can increase your deposit and part can go directly to your lender to lower your mortgage interest rate for the initial term.
That means you can buy with only a 3 percent deposit and benefit from smaller monthly repayments during those early years when buyers often need the most financial breathing room.
You can also try the Rate Reducer calculator on the Own New website to see how much you could save every month.
If you are finding this content helpful, please hit the subscribe button. It helps the series reach more people and enables more buyers to get onto the property ladder.
Let’s look at how this worked for one of my clients, a first-time buyer in Glasgow.
He had his heart set on a modern three-bedroom home priced at £295,000. He had saved for his deposit, but once he had covered stamp duty, solicitor fees and other costs, his deposit had reduced to around 3 percent of the purchase price.
His visa status also limited some mortgage options, which is a common challenge for international professionals working in the UK.
After reviewing his finances and goals, I structured a tailored solution using Own New’s Rate Reducer.
With a 5 percent builder contribution, the support was split strategically. Two percent went towards his deposit and three percent went towards reducing his mortgage rate.
The result was that he was able to buy his home with only a 3 percent deposit and secure monthly repayments of around £1,324.
This allowed him to live close to the hospital where he works and in an area with excellent schools without stretching his budget beyond what felt comfortable.
It is a good example of how expert advice and innovative schemes like Rate Reducer can work together to make home ownership achievable for more people.
Whether you are a first-time buyer, a family looking to move, or an investor considering new build options, Rate Reducer can help you start with a smaller deposit, lower payments and greater confidence.
If you would like to see how much you could save, try the Rate Reducer calculator at ownnew.co.uk. It is quick and simple and provides an instant estimate of potential monthly savings.
For tailored guidance, speak to a participating home builder or a qualified mortgage adviser who can explain exactly how Rate Reducer could work for your situation.
With the right advice and the right scheme, owning your dream home could be closer than you think.
Thank you for watching this episode of On the Ladder. Hit the subscribe button to be the first to know when the next episode drops. Please leave any questions you have in the comments and we will cover them in future episodes.
This has been On the Ladder and you just took the next step. See you next time.
