Quick answer
Own New Rate Reducer lets a housebuilder contribute 3% or 5% of the purchase price on participating developments. Instead of cutting the price, that money is used to buy down your mortgage interest rate for the initial fixed term — typically 2 or 5 years — lowering your monthly payments while you own 100% of the property from day one and pay the full purchase price.
Two facts matter more than the headline saving: lenders assess how much you can borrow using the full market rate, not the discounted one, so the scheme does not increase your maximum borrowing — and when the discounted period ends, your payment reverts to whatever rates are available then, on a loan balance that a price discount would have made smaller.
How Own New Rate Reducer works
On a participating new-build plot, the housebuilder agrees to contribute 3% or 5% of the purchase price. Rather than paying that to you, or knocking it off the price, the contribution is sent to your mortgage lender via Own New, which works with more than 60 housebuilders including Barratt Homes, Bellway, Persimmon and Cala. The lender uses the contribution to offset your interest charges, reducing your quoted rate for the initial fixed period of the mortgage — usually a 2-year or 5-year fix, depending on the product.
You still buy the property at its full price and own 100% of it from completion — Rate Reducer is not a shared-ownership or equity-loan product. You'll typically need at least a 5% deposit, and you'll go through a normal mortgage application with a regulated broker and full affordability checks, arranged through an Own New-approved lender.
Because the price stays on the record at full value, the developer's headline sale prices — which feed into future plot pricing and comparable sales data — are protected. That is the commercial reason builders prefer funding a rate discount over a price cut, and it is worth understanding before you assume the two are equivalent.
Rate Reducer vs a price discount — which is worth more?
There is no single right answer — it depends on what you value and how long you plan to keep the mortgage. Both routes start from the same builder contribution, so it is genuinely worth running your own numbers through the calculator above. In broad terms:
A price discount permanently reduces your loan size. You borrow less from day one, so you pay less interest for the entire life of the mortgage, not just the initial fixed period, and your loan-to-value is lower, which can unlock better rates on every future remortgage.
Rate Reducer keeps your loan at the full amount but gives you a lower monthly payment during the initial fixed term — often a bigger cash-flow saving in year one than the equivalent price cut would produce, because the whole contribution is concentrated into 2 or 5 years rather than spread across 30. The trade-off is that your loan balance is larger throughout, and once the discounted term ends you're paying market rates on that larger balance.
Neither is automatically better. If you value maximum cash-flow relief in the first few years and plan to remortgage or move before payment shock bites, Rate Reducer can work well. If you value a genuinely smaller mortgage and lower lifetime interest, ask whether the builder would consider the same contribution as a price reduction instead — though as above, many won't.
What happens when the reduced rate ends
At the end of the initial fixed period, your mortgage reverts to a new deal at whatever rates are available at the time, or the lender's standard variable rate if you don't arrange a remortgage. Because Rate Reducer doesn't reduce your loan balance, this reversion is applied to the full outstanding amount — which is why the jump in monthly payment can be significant, particularly on the 2-year product.
This is the honest centrepiece of the scheme that's easy to miss in developer marketing: the low headline rate is real, but it is temporary, and it applies to a loan that is larger than it would have been under an equivalent price discount. Review your remortgage options several months before the fixed term ends, and budget for the reverted payment shown in the calculator above, not just the discounted one.
It's also worth being clear on one point that catches buyers out: lenders assess how much you can borrow using the full market rate, not the Rate Reducer rate, specifically so that you can demonstrably afford the payment once the discount ends. The scheme lowers your payment during the initial term — it does not increase your maximum borrowing.
Deposit Unlock closed in April 2026 — what's still available for new-build buyers
Deposit Unlock, the industry-backed scheme that let buyers purchase a new build with a 5% deposit using a developer-funded insurance policy, closed to new applicants on 30 April 2026. Buyers with an outstanding mortgage offer already in place at that date continue to be honoured by their lender, and existing Deposit Unlock mortgage holders are unaffected — but you can no longer start a new Deposit Unlock application.
For new-build buyers, the options that remain include Own New Rate Reducer and related Own New products such as Deposit Drop (a standard 95% LTV mortgage on a participating new build, with no shared-ownership element), newer builder-funded equity-loan style schemes on some developments, standard 90-95% LTV mortgages from the open market, and government-backed routes such as First Homes and Shared Ownership where you meet the eligibility criteria. Availability varies by developer, lender and plot, so always ask what's currently on offer for the specific new build you're considering rather than assuming a scheme mentioned in older marketing is still running.
Frequently asked questions
What is Own New Rate Reducer?
Own New Rate Reducer is a scheme available on participating new-build developments where the housebuilder contributes 3% or 5% of the purchase price. That money is passed to your mortgage lender via Own New and used to reduce your mortgage interest rate for the initial fixed period — typically 2 or 5 years — lowering your monthly payments during that term.
Does Rate Reducer reduce the house price?
No. The purchase price and the recorded sale price stay the same — you still borrow against the full price minus your deposit. The builder's contribution is spent buying down your interest rate for the initial term rather than being knocked off what you pay for the property. This is a deliberate design choice by developers: it protects the development's headline sale prices, which feed into future valuations and comparable sales data.
Is Rate Reducer better than a price discount?
It depends what you value. A price discount permanently lowers your loan size, so you pay less interest for the life of the mortgage and your equity position is better from day one. Rate Reducer gives you a bigger cash-flow saving during the initial fixed period, but your loan is larger throughout and your payment jumps back up to market rates when the discount ends. Run both scenarios through the calculator above with your own numbers — neither option is automatically the better one.
What happens after 2 or 5 years?
When the initial fixed period ends, your mortgage reverts to a new deal at prevailing market rates (or the lender's standard variable rate if you don't remortgage in time). Because your loan balance hasn't been reduced by the scheme, this can mean a noticeable jump in your monthly payment — sometimes called payment shock. It's worth reviewing your remortgage options well before the fixed period ends.
Which builders offer it?
Own New works with more than 60 housebuilders, including major names such as Barratt Homes, Bellway, Persimmon and Cala, though availability varies by development, plot and participating lender. Ask the sales office directly whether Rate Reducer (or a related Own New product) is available on the specific plot you're interested in — it isn't automatically offered on every new build.
Find out what you can actually borrow
Rate Reducer changes your monthly payment, not your maximum loan. Check your real affordability across 60+ lenders, assessed at full market rates, free and with no credit search.
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Last updated: July 2026
