New build mortgage guide: offers, deposits, rates in 2026

How is a new build mortgage different?

A new build mortgage is an ordinary mortgage with four extra rules. The offer usually lasts six months. Big lenders lend no more than about 85% of the price on a new-build flat. The valuation is more likely to come in below the price. And any builder incentive worth more than 5% of the price comes off the figure the lender works from. None of that stops you buying. It does change how much deposit you need, when you apply, and how you time exchange and completion. This page walks through each rule with lender sources, then shows how Your First Home is expected to change the arithmetic.

How long does a new build mortgage offer last?

Usually up to six months, and that is the problem. Most mortgage offers are written for a purchase that completes within weeks. A new build bought off-plan, meaning before it is built, can take much longer, and if you complete after the offer expires “your mortgage application will need to be re-assessed by starting your application over again” at whatever rates apply then (HomeOwners Alliance).

Lenders know this. Some sell new-build products with “a longer validity period that can be up to three months longer than their usual deadlines”, and most will extend an offer on request, sometimes after re-checking your income and credit file (HomeOwners Alliance). Ask two questions before you apply: how long is the offer valid, and what does an extension involve?

How much deposit do you need for a new build?

At least 5% on a house and usually 15% on a flat with the biggest lenders, before any scheme. Lenders express this as a maximum loan-to-value (LTV), the loan as a percentage of the price. Nationwide lends up to 95% on a new-build house but only 85% on a new-build flat (Nationwide). Halifax’s ceilings are the same: 95% for houses and bungalows, 85% for flats and coach houses, and the mortgage plus any builder incentive cannot go above 95% and 90% respectively (Halifax).

Both lenders also require an acceptable new-home warranty, such as NHBC Buildmark, or a professional consultant’s certificate, and Halifax will not accept a warranty issued after the fact (Halifax). The buying a new build guide explains what those warranties cover.

What happens if the valuation is below the price?

The lender lends against the lower figure, and you find the difference. A “down valuation” is when “the surveyor undertaking the mortgage valuation for a lender values the property at less than the price the buyer has agreed to pay” (HomeOwners Alliance). New builds are more exposed because the price includes a premium for being new, which the surveyor may not accept.

Say you agree £230,000 with a 10% deposit and the surveyor says £220,000. The lender will now lend 90% of £220,000, which is £198,000, not £207,000. You have four options: ask the developer to drop the price, challenge the valuation with evidence of three recent comparable sales, increase your deposit by the £9,000 gap, or apply to a different lender whose surveyor may take a different view (HomeOwners Alliance). Developers often prefer to add an incentive rather than cut the headline price, which brings us to the next rule.

How do builder incentives affect the mortgage?

Incentives are accepted up to 5% of the price, and beyond that they are treated as a discount. Nationwide’s criteria allow “builder cashback, deposits, vouchers, part exchange agreements, and any other financial incentives” up to “a maximum total of 5% of the purchase price or valuation”, and accept none at all above 90% LTV (Nationwide). Halifax works the other way round: mortgage plus incentives cannot exceed 95% on a house or 90% on a flat (Halifax).

The developer must declare every incentive on a UK Finance Disclosure Form, which “brings together relevant information about the sale of newly built, converted or renovated property in a single form”, covering incentives, tenure and construction method; it has been mandatory since August 2018 and goes to the lender’s conveyancer (UK Finance). Nationwide’s valuer returns a nil valuation without it (Nationwide). So on a £230,000 home a “deposit contribution” of £11,500 (5%) passes, while £12,000 (5.2%) means the lender knocks the excess off the price and lends a percentage of the lower figure.

How do you time the mortgage with the completion date?

Apply so that the offer’s expiry date falls after the developer’s realistic completion date, and get a long-stop date in the contract. On a new build you normally reserve, then have about 28 days to exchange contracts, and if the home is unfinished you complete “on notice”: the developer tells you it is ready and you usually have 10 working days to complete (HomeOwners Alliance).

Because you are legally committed at exchange, your solicitor should write in a long-stop completion date. If the developer misses it you can walk away with your deposit back, and it should sit before your mortgage offer expires (HomeOwners Alliance). Keep your finances steady between application and completion: a new car loan or a job change can undo an extension.

What are new build mortgage rates in September 2026?

The same as any other mortgage at the same loan-to-value. Lenders price by LTV band, not by the age of the home, so the new-build effect comes through the deposit rules above. The HomeOwners Alliance’s table of the best first-time buyer rates on 26 September 2026, leaving out Danske Bank’s deals because it only lends in Northern Ireland, reads (HomeOwners Alliance):

The jump between 90% and 95% is the one that matters: 0.44 of a percentage point on the two-year fix. Every route that gets you below 90%, whether a bigger deposit, a family gift or an equity loan, buys you a cheaper band. Rates move weekly; check the table’s date before you rely on it.

How does Your First Home change the picture?

It is expected to turn a 95% new-build mortgage into a 77.5% one. Under the scheme announced on 26 September 2026 you put down 2.5%, the government lends 20% as an equity loan with an initial interest-free period, and a mortgage covers the remaining 77.5% (GOV.UK). That mortgage sits in the 75% to 80% band, where the best two-year fix on 26 September 2026 from a lender operating across England was 5.00% rather than 5.57% (Danske Bank listed 4.69%, but it only lends on homes in Northern Ireland).

Three cautions, all based on how Help to Buy worked rather than on published rules. First, only lenders that sign up will offer scheme mortgages, and they may price them separately. Second, Help to Buy required the buyer’s 5% deposit to be paid at exchange of contracts (GOV.UK), so expect the 2.5% to be needed at exchange rather than completion. Third, the 85% cap on flats may not bite in the same way, because the mortgage itself is only 77.5%, but that is our reading, not a lender’s. The how it works page covers the equity loan, and this site will list participating lenders once there are any.

Worked example: a £230,000 new-build house four ways

All on a 25-year repayment mortgage at the best two-year fixed rate from a lender operating across England in the HomeOwners Alliance table for 26 September 2026 (HomeOwners Alliance); the table’s cheapest rates come from Danske Bank, which only lends in Northern Ireland, so they are left out.

The scheme route needs the smallest deposit and has the lowest payment, but you also owe the government 20% of the home’s value, repayable when you sell or at the end of the loan, and interest is likely after the free period. The repayment page shows what that costs if the home rises or falls in value. Use the calculator as a new build mortgage calculator for your own price, rate and term.

What to do next

• Ask any lender or broker three things before you apply: offer validity, extension terms, and the maximum loan on this exact home type.
• If it is a flat, budget for a 15% deposit unless a scheme changes the sums; if it is a house, 5% is the usual floor.
• Read buying a new build for reservation fees, snagging and warranties, and the 5% deposit comparison for the full 95% mortgage versus Your First Home sums.
• Run your price through the calculator and come back after the Budget on 28 October 2026, when the scheme’s rules, caps and lenders should be known.