First Time Buyer New Build Mortgage

Podcast approved by The Openwork Partnership on 07/05/25.

What are the requirements for getting a mortgage on a new build as a First Time Buyer? How does it all work?

With new builds, usually the developer will check your affordability. Once you’ve been accepted by their third party company, we then look to get the mortgage in place.

Obviously, we’ll check affordability too. There are no additional requirements for a First Time Buyer in comparison to a home mover.

We look to ensure you are on the right product available. Some lenders do offer special products for new build properties, and may give enhanced affordability for First Time Buyers, as well. It all depends on what the lender is offering at the time you’re purchasing.

How much deposit do I need for a mortgage on a new build property?

A 5% deposit is the minimum. Ultimately, rates vary depending on different lenders, but also on the deposit you have. With a 10% deposit, you’ll get a better rate than if you had a 5%.

If you’re buying a new build flat, that deposit requirement does increase. Lenders often require 15% or 20% for a flat. Generally for houses, it’s the same for a new build as any other house – it would be a 5% deposit.

Can I use government schemes to get a mortgage on a new build?

Yes, government schemes are utilised a lot with new builds. Multiple schemes are available. There’s the First Home scheme, which provides a discount on the market value of the new build for First Time Buyers.

The one we see most used is Shared Ownership, where you purchase a share of the property and pay rent on the remaining percentage [information correct at time of recording in April 2025].

What types of new build properties can I get a mortgage for as a First Time Buyer?

Generally on new build sites you are going to have a lot of houses and a lot of flats. There aren’t any specific houses you’re limited to. A lot of sites will have different options on two, three and four bed houses and sometimes five bed, depending on where you are.

There are different options with flats as well. It could be a one or two bed flat, maybe a three bed. There aren’t any limitations in that aspect.

What should I consider when choosing a new build mortgage advisor?

We would definitely advise you to speak to an advisor. This way the advisor can ensure that you are with a lender who will provide the amount you need for the property, with your deposit included.

Alongside that, we ensure it’s going to be the right rate available at the point of application. Also, because new builds tend to take longer to progress to completion, you ideally want an advisor who is going to proactively look for a new, lower rate as time progresses.

Are there any special considerations to be aware of as a First Time Buyer for a mortgage on a new build property? What are the benefits and drawbacks of new build homes?

It’s ultimately down to the applicant buying the property, and what’s feasible in terms of extra fees and costs. These can vary depending on whether it’s a brand new home or not.

Some considerations include buyer’s incentives. Often developers offer to pay the stamp duty, or provide a discount on the home itself.

For home movers going into a new build, there are part exchange schemes with some sites. Like a part exchange with a car, they will take your property off your hands to ensure you can secure the new build plot you want – because they are quite specific.

Some people might want to plot on a certain area of the site. If there’s only one available, they might go down the part-exchange route to avoid losing that.

You will usually have to pay a reservation fee up front. They vary, so we can’t give an exact figure. I’ve done one, for example, a week ago where the reservation fee was £1,000. On a second-hand home, you wouldn’t have to pay a reservation fee at all, just your deposit.

There are different property types, too, which can be leasehold and freeholds. A lot of new builds could include leasehold charges, predominantly for flats.

You also have to consider completion deadlines. It could be short notice for completion, when the property is finally built, and that has to be considered in the mortgage offer. Most offers are valid for up to six months, but they can be extended, especially in the case of new builds.

There are also warranties with new builds, and although they are not linked directly to the mortgage, it’s handy for buyers to know about them. A National House Building Council (NHBC) warranty lasts 10 years and will cover any issues with the property. That’s a common one that you’ll come across.

How long does the mortgage application process for a new build property typically take?

For a new build property there aren’t too many differences in timescales from a second-hand property.

The only difference is that occasionally the valuation will take a touch longer to come through – they do the valuation off the plans rather than physical valuation of the property.

The application process comes down to the lender’s and service levels. Some lenders have a 24 or 48 hour turnaround, while others can be up to five days depending on the level of applications at the time of applying.

Usually lenders with longer service times are those with the market leading rates at that time, and more applications are going through. However, that isn’t always the case. Some lenders offer a 24 or 48 hour turnaround regardless.

How do I get a mortgage on a new build property as a First Time Buyer? What’s the process?

Our job as a broker is to make it as pain-free and simple as possible. For First Time Buyers especially, there’s a stigma that buying a home is scary and stressful. It can be, but our job is to make things as straightforward as possible. There’s a lot of jargon, for example, in the mortgage industry that a First Time Buyer likely doesn’t understand.

We take that off your plate. We will speak to you to understand your needs and requirements and explore what kind of product would suit you – like two-year fixed rates, five-year fixed rates or trackers.

Then it’s a matter of us going away and sourcing the best product at this moment in time. You go and find a property and when you come back to us you’ll have the affordability check with the developer and their third party.

With the information we’ve got already, we’ll then submit the application, upload the documents and hopefully it’s a quick turnaround. Then it’s the point of valuation. Times can vary with that, but once the valuation is in and all the documents have been approved, the mortgage offer will arrive.

At that point, you’re pretty set on the mortgage side. The only changes might be if a different plot comes up and you swap over to that, or if rates drop between the initial mortgage offer and the completion of the mortgage, we can move you onto a lower, more preferential rate.

What else do we need to know about new build mortgages for First Time Buyers?

I think we’ve covered everything quite comprehensively, and in terms of how a mortgage broker can help, Jake has nailed it.

We make it as easy as possible, especially when buying a home is reported to be one of the most stressful events in anyone’s life. It’s our job to remove that stress and get you moved into your house and onto the property ladder. Then you can get on with creating memories in your new home.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Approved by The Openwork Partnership on 07/05/25.