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Mortgages for new build homes

New build homes can be in better shape and more energy efficient than older homes, but getting a mortgage for one might throw up a few extra hurdles.
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New build homes - how do you get a mortgage for a house that's still being built?
Mortgages for new build homes

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What is a new build property?

Different lenders have slightly different definitions of ‘new build’ for mortgage purposes but generally speaking it’s one that is newly built and has never been bought by anyone. 

It can also include properties that have recently been converted or substantially renovated to be sold on, or ones that are still being built or are yet to be built, which you will buy ‘off plan’. 

How to get a mortgage for a new build home

Lenders may require a higher deposit when you’re buying a new build home versus an older one as there’s a risk that its value could fall in the first few years because it’s not brand new anymore. 

If you're buying a new build home 'off-plan' you may find it a lot harder to get a mortgage than for one that has already been built. There are extra risks for you and the mortgage lender, which might not be as willing to give you as favourable a deal as it would otherwise.

The process for getting a mortgage is the same regardless of whether your home is a new build or not, but if it’s off-plan you may need to send the lender some blueprints and images showing what the property will eventually look like.

Applying for mortgages on new build houses

The timing of your mortgage application is important, particularly if the new build is still incomplete. Your mortgage offer will have a validity period, meaning it could expire before the home is built, so you will need to check what the provider's standard validity period is to make sure it’s likely to give you enough time.

Many mortgage providers put a six-month deadline on their offers but this can vary between providers, so it's best to check before you make your application.

If the property is delayed or not completed in time, speak to your mortgage provider to ask if it will extend the offer. If it refuses, you will have to make your mortgage application all over again.

There are other factors that could complicate completing the purchase, including a change in the value of the new build you're buying. In the time between placing an offer and actually buying the property, many things including the value can change, and that would give the lender the right to withdraw its offer.

Some new build developers will impose a deadline to complete the purchase (sometimes as short as 28 days), which would reduce the risk of anything changing and affecting the mortgage, but the lender might be reluctant to give you the money that quickly, so double check if it can accommodate stricter timelines.

Help to Buy mortgages and new builds

The Help to Buy scheme is aimed at helping first-time buyers get onto the property ladder through an equity loan. For example, some first-time buyers might only be able to save enough deposit for a 95% mortgage but wouldn't be able to afford the higher interest rates that apply when you borrow such a large percentage of the property’s value.

The Help to Buy: Equity Loan scheme in England is a loan of up to 20% from the government with no interest for the first five years and you would only need to put down a minimum 5% deposit. 

With the London Help to Buy scheme, you can buy a home within one of the London boroughs using an equity loan from the government worth up to 40% of the value. 

The scheme applies to new builds only and you must be a first-time buyer to be eligible.

The government also launched its First Homes scheme in June 2021, which provides a discount of at least 30% on the price of new build homes in England.

Where to buy a new build home

Most property search engines have a new build home filter, but many developers also have their new build homes listed, including information on whether or not they are eligible to be bought through a government financing scheme like Help to Buy.

With some new build homes and schemes, people who live or work in the area are given priority to buy them. Although you can buy new build homes as an investment, some councils impose rules on developers to ensure that a portion of the homes they build are sold to people who will live there.

If you are buying a new build home as your first home, you should check your local area's listings to see if there are any initiatives to help local people get onto the property ladder.

Pros and cons of a new build home


  • You’ll be the first person to live there so it should be pristine with no decorating or renovations to do

  • You can often choose the fixtures and fittings the builder puts in, such as appliances or flooring

  • Developers may offer incentives to convince you to buy from them – like paying your stamp duty, for example (although this could be deducted from the value of the property for mortgage purposes)

  • You may be able to use a scheme, such as Help to Buy to make it easier to afford

  • You don't have to worry about a property chain ahead of you delaying the buying process 

  • New build homes are likely to be in a better condition than older ones and need less maintenance

  • New homes are more energy efficient and may have more modern features

  • New builds come with a warranty that covers you for any defects in the property


  • They can cost more than older homes

  • The property can go down in value once you’ve bought it as it’s no longer new

  • New builds can be smaller than older homes

  • You may have to pay for the maintenance of any shared spaces

  • If you buy a leasehold property you’ll have to pay ground rent and services charges

  • It can be harder to get a mortgage and the legal process can be more complicated

  • There could be delays in the property being built if you’re buying off-plan and your mortgage offer could expire before its completed

  • An off-plan property could go down in value before its completed but you’ll still have to pay the price you agreed, which could mean your mortgage provider won’t lend you the amount you need 

  • The developer could go bust before the property is completed, which means you could lose the deposit you paid when exchanging contracts if it’s not protected

  • You’ll usually pay a reservation fee to secure the property, which you’ll lose if you don’t or can’t go through with the purchase. The developer could also sue you

  • There may be minor problems or ‘snags’ with the property when you move in, which will need to be fixed by the builder


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