Guides — New Build Deposit

New Build Deposit Guide 2026 — How Much Do You Really Need?

New build deposit guide 2026 — houses vs flats, 5% routes, incentive impact, LISA boost, Rate Reducer. Worked examples at 5%, 10%, 15%, 25%. Doulton Bridging Finance.

The minimum deposit for a new build house is 5% via the Mortgage Guarantee Scheme or Own New Rate Reducer on participating developments. For flats, the minimum is 15%–25%. But the required deposit may be higher than the lender's stated minimum if developer incentives exceed 5% of the purchase price — and the optimal deposit level may be different from the minimum, depending on which lender and rate you want. This guide explains every aspect of new build deposit calculation.

5%
Minimum deposit — new build house (MGS or Rate Reducer)
15%–25%
Minimum deposit — new build flat (lender-dependent)
£1,000/yr
LISA government bonus — adds to deposit free of charge
5%
Incentive threshold — above this, effective deposit increases
GUIDES — NEW BUILD DEPOSIT

Sources of deposit for new build

Savings (personal bank or savings account): straightforward. Lifetime ISA (LISA): up to £4,000/year saved attracts 25% government bonus (£1,000/year maximum). Accumulated LISA savings + bonus can be used on first property purchase under £450,000. Gifted deposit: family gift with gifted deposit letter (no repayment obligation). Must be declared to lender. Not a loan from family — that is assessed as debt. Help to Buy equity loan proceeds (from those who previously purchased under Help to Buy and have now repaid the loan): £1.74bn has been repaid to date — some buyers are recycling these proceeds as deposits. Own New Rate Reducer contribution: not a deposit — it reduces your rate, not your loan requirement.

How incentives affect the deposit

Developer incentives above 5% of purchase price cause the lender to reduce the property value used for LTV. This increases the effective deposit required. On £300,000 with £25,000 incentives (8.33%): excess above 5% = £10,000. Lender reduces base to £290,000. At 90% LTV on £290,000: max loan £261,000. Deposit required: £300,000 - £261,000 = £39,000 (13%, not 10%). Always model incentive impact before finalising your deposit calculation.

Why a larger deposit than minimum is often worth it

At 90% LTV (10% deposit), rates are typically 0.3%–0.5% higher than at 85% LTV (15% deposit). On a £250,000 mortgage, 0.4% rate difference = £1,000/year saving. Additional £12,500 deposit (from 10% to 15%) is recovered through rate savings in 12.5 years — and you also have lower monthly payments throughout. Where the additional deposit comes from savings earning 4%+ (cash ISA, savings account), the comparison is closer. DBF models the deposit vs rate trade-off for every buyer.

New Build Deposit — Worked Examples by Purchase Price and Deposit Level August 2026

PropertyDeposit %Deposit (£)MortgageRate (example)Monthly
House £250,0005% (MGS)£12,500£237,5005.20% (2yr MGS)£1,448
House £250,00010% (standard)£25,000£225,0004.52% (2yr 90% LTV)£1,244
House £250,00010% (Rate Reducer)£25,000£225,0001.87% (2yr RR 90% LTV est.)£934
House £350,0005% (MGS)£17,500£332,5005.20%£2,028
House £350,00010%£35,000£315,0004.52%£1,742
House £500,00010%£50,000£450,0004.40% (2yr 90% LTV)£2,476
Flat £300,00015% (min flat)£45,000£255,0004.75% (2yr 85% flat LTV)£1,378
Flat £300,00025%£75,000£225,0004.10% (2yr 75% LTV)£1,208

Worked example

First-time buyer with LISA savings. Target: new build house £295,000.

  • LISA savings over 3 years: £12,000 saved + £3,000 bonus = £15,000 total.
  • Additional savings: £14,750. Total deposit: £29,750 (10.08% of £295,000).
  • Mortgage: £265,250. Rate (standard 90% LTV, 2yr fix): 4.52%. Monthly: £1,467.
  • Alternative — Rate Reducer (if development participates):
  • LISA savings: £15,000. Need additional £29,750 for 15% deposit (£44,250) for 85% LTV Rate Reducer.
  • Additional savings needed: £29,250. Savings rate 4%: 7.3 years to reach this level — too long.
  • Practical outcome: MGS route (5% deposit = £14,750). LISA covers this fully.
  • LISA contribution: £14,750 → covers full 5% deposit. No additional savings needed.
  • MGS lender: Halifax 95% LTV. Rate: 5.20%. Monthly: £1,660.
  • Higher rate but zero additional deposit saving required. Total ready-to-go with LISA alone.
The Process

How it works

01

Tell us about your purchase

Share the property details, development, scheme type (Rate Reducer, MGS, shared ownership), and your deposit. We assess your situation same working day.

02

Lender search and scheme check

We identify which lenders accept your income type, development, and property classification — including Rate Reducer and MGS eligibility where relevant.

03

Application and valuation

We manage the full application, coordinate the RICS valuation, and liaise with the developer on build schedule and offer validity.

04

Mortgage offer and completion

Once the offer is issued, we monitor build progress, manage any extensions needed for off-plan delays, and coordinate completion.

FAQs

Frequently asked questions

What is the minimum deposit for a new build house?

5% via the Mortgage Guarantee Scheme (houses up to £600,000) or Own New Rate Reducer on participating developments. Without scheme access, 10%–15% is the standard minimum for most mainstream lenders.

What is the minimum deposit for a new build flat?

15% (85% LTV) for most lenders. Some lenders cap at 25% (75% LTV) for certain flat developments or where EWS1 is not available.

Can I use LISA savings toward a new build deposit?

Yes — LISA savings plus the 25% government bonus (up to £1,000/year) can form your deposit on a first home under £450,000. LISA can be combined with the MGS for maximum accessibility.

Do developer incentives increase the deposit I need?

Incentives above 5% of the purchase price increase the effective deposit required — because the lender reduces its valuation base by the excess. Always disclose all incentives and ask DBF to model the impact before finalising your deposit.

Can a gifted deposit from family be used on a new build?

Yes — most new build lenders accept gifted deposits with a gifted deposit letter confirming no repayment obligation. DBF confirms the specific requirements for your chosen lender.

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