New build - Deposit paid

[Dueanamechange2025]

With these schemes, does the mortgage provider still expect you to have a full deposit or does this mean you could get away with a smaller deposit then the normal 5/10%?

I think for new builds the deposit is just to hold the property.

Generally the deposit is to the house building company to reserve the house for you. It is normally lost if you withdraw. Some deals have a fixed time limit before you have to exchange contracts when you pay 5/10% of the house purchase price.
So to answer directly, the deposit is not instead of the exchange amount.

I'm pretty sure our reservation fee was taken off the price of the house and thus deposit. We actually got a fee refunded a few years ago when we pulled out of a sale before exchange, I'm sure that's not usual though.

How big is your fee?

These type of ad’s I’m referring to?

Oh yes I see what you mean, so when we looked at this 5 years ago we were told we still had to make a minimum of a 5% deposit, it's a stipulation of the lender. There is a cap on how many cash incentives lenders will allow, all to do with your demonstration of affordability. So I assume you would still need to put up 5% deposit, the lender would then put down 5%, enabling 90%LTV rate (which is quite key as a lot of lenders won't lend 95% on a new build). That said it may even be stricter than that requiring you to put down 10% depending on what lenders are doing at the moment.

But that's all from my somewhat dated and limited experience, if you call the show room they'd be able to tell you very quickly.

Thank you! That’s really helpful and what I kind of thought. I didn’t want to call up and ask really stupid totally obvious questions so thanks for giving me a starting idea of how it works.