New build mortgage explained
A new build mortgage is a standard residential mortgage, but new builds need extra care: developers often set tight exchange deadlines, some lenders ask for a higher deposit on new-build flats, valuations can be cautious in the early years, and any developer incentives must be disclosed. Starting early and using a lender comfortable with new builds keeps the purchase on track.
Timing is the big one
The most common new-build pitfall is the clock. Developers frequently require you to exchange contracts within a short window of reserving, while a mortgage offer takes time to arrange and may expire if completion is far off (for a property still being built). The fix is to start the mortgage early, respond quickly to the lender, and choose a lender whose offer timescales fit the developer's deadline.
Deposit, valuation and incentives
- Some lenders want a higher deposit on new-build flats than on houses.
- Valuations can be cautious on new builds, so the valued figure may differ from the asking price.
- Developer incentives (paying fees, adding extras) must be disclosed, as they affect the real price.
- Look for warranties and that the build meets lender requirements.
Get the right lender
Lenders vary in how they handle new builds, deposit rules, offer validity and incentive policies, so the choice of lender matters more than usual. A broker who places new-build cases knows which lenders fit the property type and the developer's timeline. We introduce you to a regulated broker who can advise.
Common questions
Why are new builds treated differently?
Lenders sometimes apply stricter rules to new builds, such as higher deposit requirements on new-build flats, because values can be harder to gauge in the first few years. The buying process also runs on the developer's timetable, with exchange deadlines that put pressure on the mortgage timing.
What is the deadline pressure?
Developers often require you to exchange contracts within a set period, sometimes around a month, of reserving. Because a mortgage offer takes time to arrange and can have an expiry, you need to start early and keep things moving so the offer is ready before the deadline.
Do I need a bigger deposit?
Sometimes. Some lenders ask for a larger deposit on new-build flats than on houses, reflecting how they view the risk. It varies by lender, so it is worth checking the requirement for the specific property type before you reserve.
What about incentives from the developer?
Developers may offer incentives such as paying some costs or including extras. Lenders want these disclosed because they can affect the true price and the valuation. Be open about any incentive so it does not derail the mortgage later.
New to all of this? Start at the first-time buyer hub.
Founder, MortgageExplained, MortgageExplained
Adam spent nearly a decade as a mortgage adviser at Just Mortgages, with further experience in commercial finance. He is CeMAP and CF qualified. He built MortgageExplained to do one thing well: explain mortgages in plain English, then introduce you to a regulated broker when you are ready. Every page is written and reviewed by Adam.
Last reviewed: 29 June 2026