A scheme designed to make mortgages more affordable to people buying new build homes has been launched nationwide. Funded through a subsidy paid for by the builder, ‘Rate Reducer’ is a unique mortgage that provides movers and first-time buyers with access to lower interest rates and reduced monthly payments during the initial mortgage period.
Stephen Grant, Sales & Marketing Director at Rowland Homes, said: “We’ve seen many potential buyers put their moving plans on hold because of interest rates. It is extremely pleasing to work in partnership with Own New and offer Rate Reducer to our customers – giving them access to highly competitive mortgage deals which make purchasing one of our new build homes so much easier.”
Eliot Darcy, founder of Own New, said: “Higher interest rates combined with high inflation and the resulting squeeze on household budgets have made it more difficult for people to purchase their next home. With the support of our house builder partners like Rowland Homes, the Rate Reducer scheme is making it possible for buyers to purchase the home of their dreams, while keeping monthly mortgage repayments to a level they can afford.”
Andy Mannion, RSC New Homes said: “We calculated that on a 25-year mortgage, with a two-year fixed rate deal at 4.46 per cent, buyers of a new house priced at £350,000 would have been facing initial monthly repayments of £1,162 on their property*. A figure like that will be well above a lot of people’s budget levels, especially in the current financial climate.
Andy continued: “But with an Own New Rate Reducer mortgage of 0.84 per cent, buyers of that same property would be paying just £776 per month on their mortgage for the first two years. That’s a significant saving of £386 a month. *
“Without having access to the lower interest rates provided with a Rate Reducer mortgage, most people’s options become seriously limited. Many would have been faced with either taking out a longer-term mortgage, opting for a house in a lower price bracket or simply to carry on living where they are.”
* Rates stated as of 29.07.2024, figures are based on 60% LTV.
