Own New Rate Reducer Calculator

Own New Rate Reducer Calculator

Estimate your mortgage savings with the developer-funded subsidy scheme.

3% Contribution (Standard) 5% Contribution (Enhanced)

2 Year Fixed 5 Year Fixed

Your Estimated Results

Reduced Monthly Payment £0.00

Standard Payment: £0.00

Monthly Saving: £0.00

Total Term Saving: £0.00

Developer Subsidy: £0.00

*Note: This is an estimate based on average lender criteria. Actual rates depend on the specific lender (e.g., Virgin Money, Halifax) and developer agreement.

What is the Own New Rate Reducer?

The Own New Rate Reducer is a revolutionary mortgage scheme specifically designed for new-build home buyers in the UK. Unlike traditional mortgage incentives like cashback or upgrades, the Rate Reducer uses the developer's contribution to directly subsidize your interest rate for the first few years of your mortgage.

How the Calculation Works

When you buy a qualifying new build property, the developer agrees to pay a contribution (typically 3% or 5% of the purchase price) to the lender. This money is then used to offset the interest you would normally pay. Our calculator determines the difference by:

• Loan Calculation: Determining your total loan amount after your deposit.
• Market Comparison: Calculating the standard monthly payment based on current market rates.
• Subsidy Distribution: Spreading the developer's 3% or 5% contribution over your 2 or 5-year fixed period.
• Monthly Offset: Subtracting that monthly subsidy from your standard payment to show your new, lower cost.

Example Scenario

If you purchase a home for £300,000 with a £30,000 deposit, and the developer offers a 5% contribution (£15,000), that £15,000 is used by the lender to reduce your interest rate. On a 2-year fix, this could reduce your monthly payments by over £600 per month compared to standard market products, effectively giving you access to rates significantly below the "headline" market rate.

Who is eligible?

The scheme is currently available through participating national and regional developers and a growing list of lenders, including Virgin Money and Halifax. It is available for both first-time buyers and home movers on selected new-build plots.

function calculateRateReducer() { var price = parseFloat(document.getElementById('propertyPrice').value); var deposit = parseFloat(document.getElementById('depositAmount').value); var term = parseFloat(document.getElementById('mortgageTerm').value); var marketRate = parseFloat(document.getElementById('marketRate').value); var contributionPercent = parseFloat(document.getElementById('contributionTier').value); var fixPeriod = parseFloat(document.getElementById('fixPeriod').value); if (isNaN(price) || isNaN(deposit) || isNaN(term) || isNaN(marketRate)) { alert('Please enter valid numerical values'); return; } var loanAmount = price – deposit; if (loanAmount <= 0) { alert('Deposit cannot be greater than or equal to the property price'); return; } // Standard Mortgage Formula: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1] var monthlyRate = (marketRate / 100) / 12; var numberOfPayments = term * 12; var standardMonthly = (loanAmount * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1); // Developer Subsidy Calculation var totalSubsidy = price * (contributionPercent / 100); // The subsidy is effectively divided over the fixed term (2 or 5 years) var monthsInFix = fixPeriod * 12; // In the Own New model, the lender applies the lump sum to lower the rate. // A simple but accurate representation for users is the monthly reduction. var monthlySavingAmount = totalSubsidy / monthsInFix; var estimatedReducedPayment = standardMonthly – monthlySavingAmount; // Validation for negative results if (estimatedReducedPayment < 0) estimatedReducedPayment = 0; // Display results document.getElementById('reducedPayment').innerText = '£' + estimatedReducedPayment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('standardPayment').innerText = '£' + standardMonthly.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('monthlySaving').innerText = '£' + monthlySavingAmount.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('totalSaving').innerText = '£' + (monthlySavingAmount * monthsInFix).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('subsidyValue').innerText = '£' + totalSubsidy.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); } // Initial calculation on load window.onload = function() { calculateRateReducer(); };