Your mortgage offer has a shelf life. The build might not fit inside it
This is the single biggest difference and it catches people out constantly. A mortgage offer typically lasts six months. If you buy off-plan and the home is not finished within that window, the offer can expire before you complete.
Some lenders offer longer, and a smaller number will extend, but an extension is a fresh look at your circumstances rather than a formality. If your income, your job or your credit file has changed since, the answer can be different the second time.
It is one of the few situations where the cheapest rate is often the wrong choice. A lender that holds an offer for longer, or extends it without re-underwriting, can be worth considerably more than a small difference in rate.
The builder's deadline is not the same as your solicitor's
Reservation agreements on new-build usually require exchange within a set period, commonly 28 days. That is a genuinely short window for a purchase that involves a survey, searches and a mortgage offer.
It means the order of operations matters more than on a second-hand home. Have your agreement in principle sorted before you reserve, not after, and instruct a solicitor who has done new-build before. Losing a reservation fee because the paperwork ran slow is an avoidable and expensive way to learn this.
Incentives are helpful, and they can move the valuation
Builders commonly offer help with your deposit, stamp duty paid, flooring, white goods or a part-exchange. These are real value and there is nothing wrong with taking them.
What matters is that lenders take a view on them. Many will treat incentives above five per cent of the purchase price as effectively a discount and lend against the lower figure instead. So a home priced at a certain figure with substantial incentives may be valued for lending purposes below what you have agreed to pay.
That does not make the deal bad. It does mean the deposit you need can be larger than you expected, and that is much better discovered before you reserve than a fortnight before exchange. Tell us what the incentive package is and we will tell you how a lender is likely to read it.
New-build flats and houses are not treated the same
Lenders generally want more deposit on a new-build flat than a new-build house, and some apply limits on how many flats in one block they will lend against. If you are buying an apartment, the lender choice narrows.
Leasehold terms matter too. Ground rent arrangements that escalate can make a property difficult to mortgage, both for you now and for whoever buys it from you later.
The valuation is not a survey, and new does not mean perfect
The lender's valuation confirms the property is worth enough to lend against. It is not an inspection of workmanship, and it will not find the things a snagging list finds.
Most builders offer a warranty, and new homes come with a ten-year structural warranty as standard, but that covers structure rather than finish. A separate snagging inspection before you complete is money well spent, and it is entirely normal to commission one.
What we would do
Get your agreement in principle in place before you reserve, so the 28 days start with the mortgage already moving.
Establish the full incentive package in writing and work out how a lender will treat it, before it becomes a deposit problem.
And pick the lender on offer length and criteria as well as rate, particularly on a plot that will not be finished for months.
New-build mortgages, answered
How long does a mortgage offer last on a new-build?
Usually six months. Some lenders offer longer and some will extend, but an extension normally means your circumstances are looked at again, so a change in income or credit can affect it.
Do builder incentives affect how much I can borrow?
They can. Many lenders treat incentives above about five per cent of the price as a discount and lend against the reduced figure, which can mean you need a larger deposit than expected.
Do I need a bigger deposit for a new-build flat?
Often yes. Lenders are generally more cautious on new-build flats than houses, and some limit how many units in a single block they will lend on.
Is the lender's valuation a survey?
No. It confirms the property is adequate security for the loan. It is not a check on workmanship, which is what a separate snagging inspection is for.
What happens if the build is delayed past my offer?
You either extend the existing offer or apply again. Neither is automatic, which is why offer length is worth weighing alongside the rate when you are buying off-plan.