Own New has updated its proposition to allow the entire use of builder incentives to reduce rates when borrowing to purchase a new-build home.
The provider, which allows buyers to access high-loan-to-value (LTV) mortgages for new-build borrowing, has updated its model to make new-build homes more affordable, it said.
Own New will now allow the full value of a builder incentive to be used to reduce a borrower’s interest rate and monthly payments, when compared to a lender’s equivalent standard mortgage.
Any remaining amount is paid to the borrower as cashback.
Own New said the updated structure would make the incentive clearer for buyers.
It offers two products, including the Own New Flex, which combines a 3% builder incentive for a lower rate and allows builders to add an additional 2% where available. The top-up is intended to help buyers with upfront home buying costs, such as the deposit.
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Using the 5% incentive through the Rate Reducer, borrowers can access rates from 2.29% on two-year deals.
Own New offers its initiative through lenders and first launched with Darlington Building Society in 2022.
Eliot Darcy, CEO of Own New, said: “Affordability remains one of the biggest barriers for buyers today. We’ve simplified how incentives work so builders can clearly show the full benefit available, with no fees, no deductions, and a direct impact on monthly payments.
“At the same time, we’re making it easier for builders and brokers to work together and turn interest into action.”
Adrian MacDiarmid, head of mortgage relations at Barratt Redrow, the simplified model meant buyers received the full incentive value and made it easy for brokers to recommend.
He added: “By making it fee-free and straightforward to explain, it stands alongside a deposit contribution as a credible alternative. Buyers understand the choice: reduce the balance or reduce the interest for lower monthly payments.”
Jason Blunden, managing director of mortgage brokerage Evolve, said: “Our clients can now get lower monthly payments in a really simple way. They see the full incentive working for them – nothing taken out. That transparency matters. And the process is simpler on our end too – we can get clients better rates without any friction.”