How new build mortgages differ

What makes a new-build mortgage different

There is no special product called a new-build mortgage. You borrow on an ordinary residential mortgage. What changes is how the lender looks at the home and the timing of the purchase.

Deposits and loan-to-value

Loan-to-value (LTV) is the mortgage as a share of the price or valuation. On a £300,000 home, a £270,000 mortgage is 90% LTV and needs a £30,000 deposit. A £285,000 mortgage is 95% LTV and needs a £15,000 deposit.

Lenders set their own rules for new builds, and they change often. Many set a lower maximum LTV for new-build flats than for new-build houses, which means a bigger deposit. Some also look at the development as a whole, such as the number of homes in the block or how many are being sold to investors. So the deposit that works on a house on one development may not work on a flat on another.

Some lenders take cash incentives, such as a deposit contribution, off the price before they work out the LTV. If a builder offers to contribute £10,000 towards your deposit on a £300,000 flat, a lender that does this treats the price as £290,000 for its LTV calculation, and your own deposit has to be big enough on that basis.

To see what lenders publish for your own deposit, the mortgage rates comparison works out each lender's published rates for your price, deposit and term: the monthly payment, the payment after the deal ends, the APRC and the true cost, each figure linked to the lender's own page. It is an illustration, not advice, and names no product as best for you.

Schemes that can help with the deposit

Several schemes work alongside a mortgage on a new build. Each has its own rules, which change, so follow the links for the current position:

• The mortgage guarantee scheme supports lenders offering higher LTV mortgages.
• Deposit Unlock is a scheme for new-build homes that lets you buy with a smaller deposit.
• The Own New Rate Reducer uses a builder's contribution to lower your mortgage rate.
• First Homes and shared ownership reduce the price or the share you buy, so you borrow less.
• A Lifetime ISA can help first-time buyers save the deposit.
• Your First Home is the new scheme announced in September 2026 and confirmed at the October 2026 Budget.
• Help to Buy has closed to new buyers in England, though Help to Buy - Wales takes applications until 31 March 2027; see the Help to Buy replacement page for what is available now.

Timing: your offer and the build

This is the biggest practical difference. With a resale home, you usually exchange and complete within weeks. With a new build, you may exchange contracts while the home is still being built, and complete months later.

How the dates fit together

Under the New Homes Quality Code, the exchange date in a reservation agreement must normally fall at least six weeks after reservation, which allows 28 days plus the 14-day cooling-off period. When the home is ready, the completion notice period is usually expected to be at least 14 calendar days unless you agree otherwise.

When the build runs late

Every mortgage offer lasts for a set period chosen by the lender, so ask whether the lender allows a longer period or extensions for new builds. If completion moves past the expiry date, you may need an extension or a new application, possibly at a different rate and after a new valuation.

Protect yourself by:

1. Asking the builder for the expected completion date and the long-stop date in the contract.
2. Asking your adviser how long the offer lasts, and whether the lender extends offers on new builds.
3. Planning for the cost of a delay, such as extra rent.
4. Keeping your finances stable between offer and completion. A new loan, a missed payment or a job change can lead a lender to look again.

The guides to buying off-plan and reservation to completion cover long-stop dates and your rights if the build is delayed.

The valuation

Your lender sends a valuer to confirm the home is worth what you are paying. For a new build, the valuer has extra information: the builder's completed UK Finance Disclosure Form, which should be ready for the valuer's visit. It sets out the price and every incentive, so the valuer can judge the real price being paid.

RICS, the surveyors' professional body, is clear that a mortgage valuation is for the lender, not for you. It is not a survey, and problems that would be costly to put right may not show up in it. For a finished new build, many buyers book a separate snagging inspection; see the snagging guide.

If the valuation comes in low

A down valuation means the lender values the home below the price. The lender then lends its LTV on the lower figure, so you need to cover the gap yourself.

For example, if you agree £300,000 and plan a 90% mortgage of £270,000, but the valuation is £290,000, a lender lending 90% offers £261,000. You would need £39,000 rather than £30,000.

Your options are to:

• Ask the builder to reduce the price to the valuation.
• Add more of your own money.
• Try a different lender, which may value differently.
• Withdraw before exchange. Check the reservation agreement for what happens to your fee.

The new-build premium tool compares a new home's price with similar local resales, which helps you see the risk before you reserve.

Incentives and the UK Finance Disclosure Form

For any newly built home not yet occupied, the seller completes the UK Finance Disclosure Form for the lender. Your solicitor receives a copy and checks with you that the price and incentives match your understanding.

The form asks the builder to list, with values:

• A deposit paid by the builder.
• Mortgage subsidies, including paying mortgage interest or subsidising the rate.
• Stamp duty or LBTT paid by the builder.
• Cashback.
• Legal and valuer fees paid.
• Non-cash incentives, such as appliances, furniture, landscaping or other items outside the standard specification.
• Part exchange: the price agreed for your old home and how far it is above or below market value.
• Help with moving and selling costs, such as estate agent fees and removals.
• Any scheme used, such as shared equity or shared ownership.
• Tenure, ground rent and service charge details.

Lenders decide how to treat each incentive. Some accept them up to a limit, some deduct them from the price, and some decline certain kinds on certain homes. That is why an incentive that looks generous can reduce what you can borrow.

The incentives guide compares the common offers with a straight price reduction.

Choosing your adviser

Builders often recommend a mortgage adviser, and some advisers specialise in new builds. Under the New Homes Quality Code:

• You are free to choose your own advisers and do not have to use one the builder recommends.
• The builder cannot suggest that a sale may not go ahead unless you use a particular adviser.
• If the builder receives a fee or reward for introducing an adviser, it must tell you the nature and expected amount in writing before you commit.
• The builder cannot offer you incentives for using a recommended adviser.

A qualified, regulated mortgage adviser can search lenders' new-build criteria and check how each treats the incentives on your plot.

Common problems and how to avoid them

Before you reserve: your mortgage checklist

1. Work out the price range your income and deposit could reach with the how much you could borrow calculator, as an illustration, not advice.
2. Get an agreement in principle.
3. Ask an adviser to confirm the lender's criteria for the specific home, including flats and the block.
4. List every incentive and ask how the lender treats each one.
5. Ask the builder for the expected completion and long-stop dates.
6. Check the warranty provider for the plot.
7. Add up the full cash needed with the cash you need calculator.

Then search new homes and compare the cash needed on real plots.