Own New: Costs and affordability

Can I afford a home through the Own New scheme?

Own New offers a more affordable route to purchasing a new-build property by reducing the interest rate on mortgage payments during the initial term. This makes monthly payments more manageable and could help buyers ‘pay down’ more capital, meaning you’ll reduce the total amount of money you owe on the loan.

Understanding the upfront and ongoing costs is essential to ensure this scheme aligns with your financial situation.

How does the Own New Rate Reducer affect affordability?

With the Rate Reducer in place, your initial interest rate will be lower, reducing your monthly mortgage payments. The exact cost will depend on the property value, deposit amount, and mortgage terms. By easing upfront costs, this scheme can:

• Free up cash flow: Allowing buyers to manage other expenses more effectively.
• Encourage capital repayment: Lower interest rates mean more of your monthly payments go toward reducing the loan balance, building equity faster.

It’s important to plan for when the Rate Reducer period ends and standard mortgage rates apply. Consulting with your Own New-approved broker will help you prepare for these changes.

What are the upfront costs of buying a home?

• Deposit: Buyers must provide a minimum deposit of 5% of the property’s market value. For example, if the property is worth £200,000, the deposit required would be £10,000.
• Mortgage broker fees: When buying through the Rate Reducer scheme, you will need to work with an Own New-approved mortgage broker. Some brokers may charge for their services so we would recommend confirming terms and fees at the start of the process.
• Legal fees: You’ll need to hire a solicitor or licensed conveyancer to manage the legal aspects of the purchase. Fees typically range between £1,000 and £1,500 (depending on the complexity of the transaction) but this can vary greatly, so we’d suggest requesting quotes from multiple firms before proceeding with your purchase.
• Stamp Duty: Buyers will pay Stamp Duty Land Tax (SDLT) when buying a house or flat over a certain price in the UK. For first time buyers purchasing a home worth up to £625,000, Stamp Duty is currently not charged on the first £425,000. However, this will be changing to £300,000 of any home that costs up to £500,000 from April 1st 2025. You can find out more about these changes to Stamp Duty, and see what you may be required to pay, on the gov.uk website here.

Where should I start my Own New search?

Own New properties are coming soon to Share to Buy. Ready to find out more? Learn about the Own New Reducer Rate, how it works  and whether you’re eligible to help you plan out your path to homeownership.