Threshold Mortgage Advice

How to get a low fixed rate mortgage in 2024

Despite inflation still being stubbornly high in the UK, interest rates on mortgages are starting to creep down, but they’re doing so slowly. You may think this leaves those looking to get onto the ladder or move home in 2024 with one of two choices:

  1. Bite the bullet and accept the best available rate you can lock into, all the while hoping that things will improve when the time comes to remortgage.
  2. Sit tight. Perhaps move back in with family? Or continue to rent, then reassess the situation in another six months to a year’s time.

While these may feel like the only options available right now, there is in fact a third – lesser known – solution, and that’s to buy using Own New’s Rate Reducer. Which, is only available for newly built homes from participating developers.

What is Own New Rate Reducer?

Own New Rate Reducer is a home buying incentive that gives buyers exclusive access to low interest rates on mortgage products with selected UK lenders.

Coming into effect in late February 2024, the scheme aims to make home buying in England more affordable, at a time when many buyers are struggling to meet higher borrowing costs.

How does Own New Rate Reducer work?

Own New Rate Reducer is just like applying for a normal mortgage. The only exception is you can only access the lower rates that selected lenders are offering when you apply for your mortgage through an approved Own New broker.

Everything else about buying a property using Own New’s Rate Reducer is the same. You find a home you love – that you can afford – and if you’re successful in securing it you go through the conveyancing process until you exchange and complete.

The only other key difference are the savings you’ll enjoy each month by locking in a lower interest rate on your mortgage than you’d be offered by the lender directly. In fact, without an Own New Rate Reducer broker by your side, you’d never even know that these lower rate fixed deals exist.

Are all homes eligible for Own New Rate Reducer?

All property types from flats to townhouses are eligible for Own New Rate Reducer, however there is a caveat – the scheme only applies to new build homes purchased through participating developers, so you can’t apply if you’re buying a second-hand home.

Is Own New Rate Reducer a government scheme?

No, unlike Shared Ownership, Own New Rate Reducer isn’t a government incentive. Own New are an independent company who partner directly with developers and lenders to offer buyers preferential rates on new build mortgages.

This type of scheme differs from those introduced by the government, who only offer you the possibility to part-buy a home or take out a loan to build one, neither of which qualify you for lower monthly fixed mortgage rates.

With Own New Rate Reducer, the incentive is applied directly to your mortgage product, so you start reaping the savings as soon as you move in. What’s more, you’ll own 100% of your home as soon as the mortgage is repaid in full.

How much can Own New Rate Reducer save me on my mortgage?

How low an interest rate you can access using Own New Rate Reducer depends entirely on how much of an incentive the developer is willing to offer you. For most developers, this is 3% or 5% of the property’s full value.

Rather than pay this to you as a cash lump sum however, the equivalent equity is used to negotiate a lower rate of interest on your mortgage. So, in essence, the builder is effectively subsidising the interest on your mortgage for your initial fixed term period.

Who is eligible for Own New Rate Reducer?

Anyone buying a new build property from a participating developer who passes the financial verification checks is eligible for the Own New Rate Reducer incentive. It doesn’t matter if you’re a first-time buyer or a home mover, so long as you’re purchasing an eligible new build property, and you can demonstrate the necessary affordability, you qualify.

What is the process for applying for an Own New Rate Reducer mortgage?

You can only apply for an Own New Rate Reducer mortgage with an approved broker who offers the scheme. This means that you cannot apply to a lender directly, and nor can you access Own New Rate Reducer products by using a non-approved broker.

Threshold’s advisers are an approved broker for Own New Rate Reducer mortgages. Our brokers have undergone full training on all Own New products, and, as a trusted broker to many of the UK’s top developers, we can help you access these lucrative lower rate deals.

Contact us today via our online form to get started on your Own New mortgage journey.

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