What is an Own New Rate Reducer mortgage?
An Own New Rate Reducer mortgage is a new product which has been launched to help first time buyers with the cost of their monthly mortgage payments, allowing buyers to purchase a new build home with a lower interest rate mortgage. It’s a normal mortgage, just with lower monthly payments for the initial two-year or five-year fixed period.
The Building Societies Association’s Property Tracker Report from March 2024 shows that the recent interest rate rises have meant that the affordability of mortgage repayments remains the biggest challenge facing prospective first time buyers. Own New’s newest product aims to help with this problem.
How does it work?
Pocket has partnered with Own New, who work behind the scenes with mortgage lenders to reduce the cost involved with mortgage loans on new build properties. The reduction is funded by a contribution by Pocket towards the cost of the mortgage and enables the mortgage lender to offer buyers more competitive interest rates during the initial two-year or five-year fixed period of their mortgage.
A purchaser would obtain advice from an independent mortgage adviser (IMA) who is trained on the Rate Reducer scheme. Then once a purchaser has reserved a Pocket home and the purchase is proceeding, Pocket would liaise with Own New to arrange for the lower mortgage rate to be applied to the purchaser’s mortgage. The contribution from Pocket would be paid to Own New when the sale completes (completion is when you get your keys!)
What mortgage rates are available?
Mortgage rates will depend on a number of factors, such as the size of the buyer’s deposit, the lender, the level of incentive available, and whether an initial fixed term of two years or five years is taken out. In some circumstances, particularly when a buyer has a larger deposit, rates below 1% could be available.
Buyers can choose between two and five-year fixed terms, depending on the lender’s criteria.
Where is Own New Rate Reducer available?
An Own New Rate Reducer mortgage is currently available on Pocket homes at Addiscombe Grove CR0.
Buyer’s will need to meet the Pocket eligibility criteria for Addiscombe Grove CR0. Eligibility is at Pocket’s discretion, subject to receiving regulated advice from an independent mortgage advisor, and is subject to lender terms and conditions.