Why can new-build mortgages become complicated?

Getting a mortgage for a new-build apartment can present many challenges. If you are buying off-plan, you need to a mortgage offer that will still be valid when the property is complete. You may find certain mortgage providers under value new build properties. If you are a first time buyer, the government’s Help to Buy scheme may give you more options that you thought you had.

As an independent mortgage broker, John Charcol is an expert in helping first time buyers- and others- to move further along the housing chain to secure new build mortgages. We can help you to find the right mortgage to get you the apartment you have set your heart on.

New build deposits

If you plan on moving into a new-build home, you might find that few banks are willing to give you a mortgage on a 10% deposit. A "Help to Buy" loan from the government can provide funding for up to 20% of the purchase price, however, this would mean that the Government owns 20% of the property until you pay off the loan.

John Charcol has access to a much wider pool of mortgage lenders for new-builds, so if you wish to get a 90% mortgage without borrowing from the Government, we can connect you with mortgage providers that will offer competitive rates you won't find on the high street.

It's also worth bearing in mind that when moving into a new-build, you'll have to pay Stamp Duty - although first-time buyers don't pay any Stamp Duty on property purchases up to £300,000, or £500,000 for shared ownership properties - as well as legal fees and the cost of valuation, not to mention kitting out your new home with furniture.


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Helping first time buyers

The Help to Buy scheme opens up all kinds of possibilities for first time buyers. Applicable for new or existing properties priced up to a value of £600,000, a Help to Buy loan can provide funding for up to 20% of the purchase price of a property, helping you to buy with only a 5% deposit. 

There are no fees for the first five years, so a Help to Buy loan also has the effect of reducing your overall monthly outgoings, versus paying a fee in other shared ownership deals, where interest or rent is payable on the share owned by the third party – for instance the property developer or housing association. This may mean that you could possibly afford to buy a new build apartment at a higher price range than you originally imagined, although this is limited to 4.5 times income and you can’t own another property, or let the property out. 

Considering time-outs and under-valuations

In a competitive market, many desirable new build apartments sell off-plan or at an early stage, long before the building is ready to occupy. A six-month mortgage offer may time-out before you are ready to complete your purchase.

With new-build apartments, valuations on what the finished property will be worth can vary considerably from the asking price demanded by the developer. Knowing which mortgage provider is likely to value higher can be the difference between securing your desired apartment and missing out because the mortgage offer falls short.

John Charcol – finding you the right new build mortgage 

As mortgage experts with years of experience, we can help you to secure a new build apartment mortgage, quickly and efficiently: 

  • As a first time buyer, we can help you to secure the best available rate on the right Help to Buy mortgage to best suit your circumstances
  • We can time a mortgage offer to ensure that it is most likely to be valid when your apartment is ready for occupancy
  • We know which mortgage providers are most likely to meet the valuation you need for your purchase
  • If your credit score is not brilliant, perhaps because you have moved around a lot or changed jobs frequently, we can approach lenders who will look beyond the score

How much can I borrow?

Mortgage loan calculator
First applicant

First Mortgage Applicant

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Second applicant

Second Mortgage Applicant

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As a guide, you could potentially borrow around:


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New Build Mortgages: Frequently Asked Questions

Does the Help to Buy scheme apply to me if I’m looking to buy a new build property?

If you are a first time buyer considering the purchase of a new build property, the Help to Buy scheme could help you not only get a mortgage, but also with a smaller deposit. Just ask us how it applies to you.

Why is my mortgage provider valuing the property at less than the asking price?

It is difficult for anyone to really know what a new-build property is worth because there is no history of buying and selling. Some mortgage companies may take a more conservative view of the value. You just need to know which one to approach.

The developer wants me to use their in-house mortgage specialist. Is this a good idea?

It’s up to you how you arrange your mortgage and you shouldn’t feel obliged to use any particular adviser or lender. As an independent mortgage provider we can help you to assess the whole market to find the best options. John Charcol has a wealth of experience arranging mortgages with developers and understands the process and how developers view applications. 

Is there a fast-track service so that I can secure the property I have my eye on now?

Unlike high street lenders we’re fast and nimble, so if you need us to talk to an Estate Agent or make things happen fast to secure a particular new build apartment in a sought after development, we’ll do everything we can to make that happen.

Can I speak to someone with the authority to make decisions based on my real circumstances rather than computer-set limitations?

Yes. At John Charcol our consultants are all experienced mortgage advisers and we use our relationships with lenders to convey your personal circumstances to decision makers.

Why choose John Charcol as your new-build mortgage adviser?

Home Insurance

We’re partners with Legal and General, so we can find you buildings and contents insurance for your new property. 

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It's important to protect yourself against the unforeseen. Our in-house team can organise mortgage protection that's tailored to suit your unique needs.

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JC Legal

Not only do we organise your mortgage, we can refer you to a trusted solicitor for the conveyancing part of the process. We have access to a select panel of trusted conveyancers and solicitors, which means we can find you legal advice specific to your needs.

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We can help you prepare your property for tenants with our exclusive Concierge Service - available through our partners Just Move In. They’ll organise for your property to be cleaned and, if you’re furnishing your property, they’ll arrange all the removals. 

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