Deposit Unlock scheme closed: Your First Home vs Own New

Is the Deposit Unlock scheme still open?

No. The Deposit Unlock scheme closed to new completions in April 2026, according to the scheme’s own website and the Home Builders Federation (HBF), which created it. Mortgage offers already issued were honoured, and existing customers keep their mortgages unchanged (Deposit Unlock; HBF). Gallagher Re, the scheme manager, says the same (Gallagher Re).

As of 27 September 2026, a buyer who wants a new build with a small deposit has three routes: a plain 95% mortgage, which the government’s permanent mortgage guarantee scheme keeps available (GOV.UK); Own New Rate Reducer, where the builder pays to lower your interest rate; and, once it launches, Your First Home, with a 2.5% deposit and a 20% government equity loan (GOV.UK).

What was the Deposit Unlock scheme?

Deposit Unlock was an insurance scheme paid for by housebuilders so that lenders would offer 95% mortgages on new builds. You put down 5% and took a normal 95% mortgage from a participating lender; the builders’ scheme covered part of the lender’s loss if the home was repossessed and sold at a loss (Deposit Unlock). As HomeOwners Alliance puts it, “the house builders pay to insure the mortgages instead” (HomeOwners Alliance).

The HBF devised it with the reinsurance broker Gallagher Re; it soft-launched with Newcastle Building Society in June 2021, with a first completion that November (Deposit Unlock, about us; HomeOwners Alliance). It was open to first-time buyers and movers on new builds priced up to £833,250, with a maximum loan of £750,000. Nationwide, Accord Mortgages and Newcastle Building Society were the main lenders, with Bluestone Mortgages and Perenna joining later (Deposit Unlock; HomeOwners Alliance). Most large housebuilders took part, in England, Scotland and Wales (HBF).

Neither the scheme nor the HBF has published a reason for closing it. The permanent mortgage guarantee scheme, which does a similar job for lenders on any home, arrived in July 2025; whether that drove the decision is unconfirmed.

What is Own New Rate Reducer?

Own New Rate Reducer is a builder incentive that lowers your mortgage interest rate instead of your purchase price. The developer pays 5% of the price to your lender through Own New, and the lender offsets that money against the interest on your mortgage for the initial fixed period of two or five years (Own New; HomeOwners Alliance). You own 100% of the home from day one and nothing is repaid later.

The scheme launched in February 2024 and is open to first-time buyers and home movers buying a new build on a development signed up to Own New, with a deposit as small as 5% (HomeOwners Alliance). Own New Flex uses a 3% contribution instead, with anything left over paid to you as cashback (Own New).

The effect during the fixed period can be large. On 24 September 2026, HomeOwners Alliance listed a two-year fixed Rate Reducer deal at 3.84% for a buyer with a 10% deposit and a 5% builder incentive, against an average two-year fix at 90% loan-to-value of 5.61%. Its example: a £200,000 mortgage at 3.84% over 30 years costs £936 a month for two years. At 5.61% it would cost about £1,149, so the reduction is worth about £213 a month, roughly £5,100 over two years.

Then it ends. Once the fixed deal finishes, HomeOwners Alliance warns, “you’ll either need to remortgage onto a new deal or you’ll roll onto the lender’s standard variable rate. You may see your mortgage rate jump significantly.” It also makes the point every buyer should weigh: the same 5% could have been negotiated as money off the price, giving you a smaller mortgage for the whole term (HomeOwners Alliance). On a home priced around £222,000, that 5% is about £11,100: a permanent cut in your debt, or about £5,100 of savings that stop after two years.

How do Deposit Unlock, Own New and Your First Home compare?

All three are new-build schemes for buyers with small deposits, but only one is government money, only one is open today, and only one is coming.

The Your First Home column comes from the government’s announcement, with the Budget date from HM Treasury (GOV.UK; HM Treasury). Interest after the free period is our assumption, based on Help to Buy’s 1.75% from year six (GOV.UK).

What would each cost on a £230,000 home?

On a £230,000 new build (the example used in reports of the announcement), Your First Home costs about £1,042 a month with £5,750 down, Own New Rate Reducer about £1,074 a month for two years with £23,000 down, and a plain 95% mortgage about £1,348 with £11,500 down. All assume a 25-year repayment mortgage and are illustrations, not quotes.

Rates: 5.55% sits between the best 95% two-year (5.57%) and five-year (5.54%) fixes on 26 September 2026, and 5.13% was the best 90% two-year fix that day from a lender operating across England (HomeOwners Alliance rate table). The 3.84% is the Rate Reducer deal listed on 24 September 2026 for a 10% deposit and 5% incentive. The 5% is our calculator’s default for a 77.5% mortgage, the best 80% loan-to-value fix that day. Run your own price in the calculator.

Two things the table cannot show. Your First Home is cheapest each month because the government has lent you £46,000 at no interest; the bill comes later, as 20% of the home’s value plus any interest after the free period. Own New needs four times the deposit of Your First Home, and against the 5.13% market rate its saving is about £151 a month for two years, roughly £3,600, from a builder incentive of £11,500.

What is the catch with each?

Deposit Unlock’s catch is that it no longer exists; Own New’s is a temporary saving paid for with money that could have cut the price; Your First Home’s is the 20% share of your home’s value and the rules still to come.

If a sales adviser or website offers Deposit Unlock, the information dates from before April 2026, when the scheme closed.

With Own New, ask the builder for the same 5% as a price cut and compare the two quotes over the full mortgage term, not just the fixed period. Taking an incentive can also weaken your hand on price, as HomeOwners Alliance notes.

With Your First Home, the interest-free period’s length, the interest after it, the income cap and the price caps are all unknown until 28 October 2026. The pros and cons page weighs the equity loan, and the repayment page shows what 20% of value means as prices move.

How do the three fit different situations?

Each route fits a different starting point, and none is a recommendation: Own New only exists on participating developments and needs 5% to 10% saved; a 95% mortgage works on any home with no strings; Your First Home is the only one designed for a 2.5% deposit, and it is not open yet.

• Buying in the next few months with 5% or more: only a 95% mortgage or Own New is available, because Your First Home has no launch date.
• Able to wait for Your First Home, with less than 5%: it is the only one built for that position.
• Offered Own New: get the price-cut alternative in writing and compare both over the full term with a regulated mortgage adviser.
• Outside England, or moving rather than buying for the first time: Your First Home is for first-time buyers in England only, so it is Own New or a 95% mortgage.

What to do next

• Check what 2.5%, 5% and 10% of your target price are in the deposit calculator; the three routes start at three different deposits.
• Read Your First Home vs a 5% deposit mortgage for the full 95% mortgage comparison.
• Looking at a new build now? Read the new build mortgages guide and buying a new build before you reserve.
• Come back on 28 October 2026, when the Budget sets Your First Home’s caps and interest terms.