Estimate your monthly mortgage savings when using the Own New scheme with a builder contribution.
2 Years
5 Years
Estimated Results
Monthly Payment (Standard)
£0.00
Monthly Payment (Reduced)
£0.00
Monthly Saving
£0.00
Total Saving (Fixed Term)
£0.00
*Calculations are based on a standard repayment mortgage. Actual lender rates and eligibility may vary.
Understanding the Own New Rate Reducer
The Own New Rate Reducer is a revolutionary scheme designed specifically for buyers of brand-new homes. By leveraging developer contributions, the scheme allows borrowers to access mortgage interest rates significantly lower than the standard market average for an initial fixed period.
How Does It Work?
When you purchase a qualifying new-build property, the developer agrees to contribute a set percentage of the purchase price (typically 3% or 5%) directly to the mortgage lender. This lump-sum payment is used by the lender to "subsidize" your interest rate during the initial 2-year or 5-year fixed-rate period.
The Contribution: Usually 3% or 5% of the property value paid by the builder.
The Benefit: You receive a drastically lower monthly mortgage payment during the incentive term.
The Ownership: You still own 100% of your home from day one.
Practical Example
Imagine purchasing a new home for £350,000 with a 10% deposit (£35,000). At a standard market rate of 5.5%, your monthly repayment might be around £1,935. However, with the Own New Rate Reducer at 1.89%, your monthly payment could drop to approximately £1,316. That is a monthly saving of over £600.
Eligibility Criteria
To use the Rate Reducer, you generally need:
To be purchasing a participating new-build property.
A minimum deposit of 5% or 10% (depending on the lender).
To pass standard lender affordability and credit checks.
function calculateRateReducer() {
var price = parseFloat(document.getElementById('propPrice').value);
var deposit = parseFloat(document.getElementById('depositAmount').value);
var standardRate = parseFloat(document.getElementById('standardRate').value);
var reducedRate = parseFloat(document.getElementById('reducedRate').value);
var years = parseFloat(document.getElementById('incentiveYears').value);
var totalTerm = parseFloat(document.getElementById('mortgageTerm').value);
if (isNaN(price) || isNaN(deposit) || isNaN(standardRate) || isNaN(reducedRate) || isNaN(totalTerm) || price <= deposit) {
alert("Please enter valid figures. The purchase price must be greater than the deposit.");
return;
}
var loanAmount = price – deposit;
var monthlyStandardRate = (standardRate / 100) / 12;
var monthlyReducedRate = (reducedRate / 100) / 12;
var numberOfPayments = totalTerm * 12;
// Amortization Formula: P * (r(1+r)^n) / ((1+r)^n – 1)
var standardPayment = loanAmount * (monthlyStandardRate * Math.pow(1 + monthlyStandardRate, numberOfPayments)) / (Math.pow(1 + monthlyStandardRate, numberOfPayments) – 1);
var reducedPayment = loanAmount * (monthlyReducedRate * Math.pow(1 + monthlyReducedRate, numberOfPayments)) / (Math.pow(1 + monthlyReducedRate, numberOfPayments) – 1);
var monthlySavings = standardPayment – reducedPayment;
var totalPeriodSavings = monthlySavings * (years * 12);
document.getElementById('standardMonthly').innerText = "£" + standardPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('reducedMonthly').innerText = "£" + reducedPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlySaving').innerText = "£" + monthlySavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalSaving').innerText = "£" + totalPeriodSavings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('results-area').style.display = 'block';
}