As with any mortgage, the amount you can borrow on a new build is based on your income, outgoings and credit profile. Most lenders are comfortable lending around 4 to 4.5 times your annual income, though in certain circumstances some lenders will stretch to 5.5 or 6 times income depending on your profession and financial circumstances.
Because lender affordability models differ so significantly — two lenders can arrive at very different figures for exactly the same applicant — searching the whole market is essential. We do that as standard, at no cost to you, to make sure you are borrowing the maximum you can comfortably afford at the most competitive rate available.
As early as possible. Once you have found a new build you want to buy and paid your reservation fee, you typically have just 28 days to exchange contracts. Given that some lenders take longer to process applications than others, starting your mortgage application immediately after reservation — or ideally before — is strongly advisable.
We recommend speaking to us even before you start viewing developments. Having a Decision in Principle (DIP) in place means you know your budget with confidence, you can move quickly when you find the right plot, and developers will take you seriously as a buyer from day one.
A Decision in Principle (also called an Agreement in Principle or Mortgage in Principle) is a document from a lender confirming how much they would be willing to lend you, based on an initial assessment of your income and a soft credit check. Most developers and housebuilders will want to see one before accepting your reservation.
We can arrange your Decision in Principle quickly — often on the same day — using integrated credit checking tools that let us review your file without leaving a mark on your credit score.
New build mortgage lenders assess applications in the same core areas as any other mortgage:
Income and Affordability — Your salary, any additional income sources and your outgoings all factor into what you can borrow. Self-employed applicants can absolutely purchase new build properties; most lenders will want to see at least two years of accounts, though some will accept one.
Credit History — A clean credit profile gives you access to the best rates. That said, past credit issues are not necessarily a barrier. Lenders take different views depending on the nature, severity and age of any issues on your file. We will review your credit history before making any applications so we can identify the most suitable lenders for your circumstances.
Deposit Size — As outlined above, 10% is the standard minimum for new builds, with better terms available as your deposit increases.
The Property Itself — New build houses are generally straightforward for lenders. New build flats, particularly in high-rise developments or in certain postcodes, can sometimes require more careful lender selection. We know which lenders are most comfortable with which property types, and we will match you accordingly.
