Own New Mortgages

Milts1234

Has anyone taken out an Own New Rate Reducer Mortgage and if so what was your experience? It seems like an absolute no brainer with the current market mortgage rates and I was surprised to find it has not been covered yet by Martin or anyone at MSE. For those wondering what it is, when you buy a new build house from certain developers you can take out a special 'Own New' mortgage. This is essentially a subsidised mortgage where the developer puts between 3-5% of the value of the house purchase towards your mortgage and it reduces the interest rate considerably (sub 2% mortgages). I think it reduces your bargaining power to get further freebies off the house builders (like paid stamp duty etc) as they've put a considerable amount of cash into this. Would love for Martin to present the maths on whether it would be better to get straight up cash off the house asking price or to take out one of these mortgages with a preferential rate. 

MWT

Make sure you understand the length of the initial term, as the mortgage rate is only subsidised for that period, not for the entire term of the mortgage.

Also check the exact deal available for your planned level of deposit. 

kingstreet

It's just a different way of taking a builder cash incentive. Be careful as this has only short-term benefits where getting a lower loan to value via a deposit contribution will benefit you for the whole mortgage term.