Barratt Developments Scotland has helped launch a new mortgage scheme in conjunction with Own New which offers lower rates for new home purchases.

For some buyers with a high deposit or equity, rates below one per cent could be available - offering more power to consumers over their monthly outgoings, which in turn will give many more people the confidence to make their first or next home move.

Launched by the housebuilder, which includes Barratt Homes and David Wilson Homes, Halifax and Virgin Money on Monday 26 February, Own New Rate Reducer works by using incentive budgets which housebuilders offer to their customers to reduce their monthly mortgage payments over a fixed term.

For example, if the housebuilder offers a five per cent incentive on a home, Own New Rate Reducer takes this sum and directly offsets it against the mortgage interest to reduce monthly payments. Buyers can opt to spread the benefit across the first two or five years, depending on their lender's criteria.

In addition to cutting monthly outgoings during that time, the customer will pay more off the capital value of their mortgage because the interest charged on the loan is lower.

Lenders will still carry out their usual affordability assessment, to check that the purchaser can afford repayments if the interest rate increases once the fixed-term benefit ends. Also, independent financial advice must be sought from a regulated mortgage broker who has completed additional training to access this scheme.

Barratt Developments worked alongside Own New to design Rate Reducer and was the first housebuilder to launch the scheme. Other developers who have supported and are signed up to take part include Persimmon, Taylor Wimpey, Bellway and Berkeley Homes.

Lenders Gen H, Furness Building Society and Perenna have also confirmed they will soon be offering mortgages through the scheme.

Steve Mariner, sales and marketing director at Barratt Developments, said: "By launching the Own New Rate Reducer scheme we are helping more people to be able to afford a home.

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"The scheme gives buyers the financial boost they need to get them onto the property ladder. They will be able to compare all the options available to them to make sure they get a mortgage product that is right for them and in their long term financial interests."

Eliot Darcy, founder of Own New, said: "Our ethos is to make home ownership and mortgage lending in this country open to more people and we are confident that the launch of the Own New Rate Reducer will achieve that.

"Alongside the national lenders and housebuilders who have signed up to the scheme, we believe that Rate Reducer will be a significant boost to many people's home-buying dreams. People can benefit from Rate Reducer whether they have a small or large deposit. For some people who already have equity in their home, it could herald the return of the sub-one per cent mortgage deal.

"We were delighted to be joined by Halifax and Virgin Money for the launch. By working together, we are increasing mortgage lending opportunities and bringing the possibility of owning a new-build home to a wider range of buyers.

"This is just the product to stimulate the housing market and to give more people a helping hand and initial boost to get onto the property ladder or to secure that new home that will give them the extra space they need."

Craig Calder, head of secured lending at Virgin Money, said: "We're delighted to be a founding lender of the innovative Own New Rate Reducer, making it easier and more accessible for customers to afford a new-build home.

"Buying a home is a major life event and this first-of-its-kind mortgage product will help customers feel happier about their big purchase, knowing that they have the certainty of a lower fixed interest rate over the initial period of the mortgage. By using the homebuilder incentive budget to offset initial mortgage repayments, buyers can focus on other costs like furnishings and decoration, to make their house a home.

"At Virgin Money we're continually looking at new and inventive ways in which we can assist borrowers, with Rate Reducer following hot on the heels of our recent Fix and Switch product, which also provides certainty and flexibility."

Amanda Bryden, head of Halifax Intermediaries, said: "We know that buying a new home is a big commitment for our customers so we're thrilled to be one of the first lenders to offer the Rate Reducer incentive through participating builders.

"This product gives customers more choice in the way they can benefit from builder incentives and is especially helpful to those who want to see a lower initial mortgage payment as they get set up in their new home.

"Supporting homeownership remains a key priority for us, and the valued advice of mortgage brokers will help borrowers understand which is the right option for them to achieve their homeownership goals."

To access Own New Rate Reducer, customers will need to speak to one of the housebuilders taking part to find a home that is available through the scheme. They will then be referred to one of a network of specialist mortgage broker partners, who will help to progress their application.

Own New was founded by Eliot Darcy, who set out to create a more accessible system of mortgage lending after being frustrated when he bought his first home. Despite having a stable income, he struggled to secure a mortgage, while friends with wealthy parents enjoyed a much more straightforward route to buying.

Own New works closely with each lender, with a target – to give customers the full benefit of the developer contribution by reducing their interest payments by at least the same value as the incentive.​

Barratt Developments is the country's largest housebuilder. It is committed to building high quality homes and this year received more NHBC Pride in the Job Quality awards than any other housebuilder for the 19th year in a row and was awarded 5 stars by its customers in the HBF satisfaction survey for the 15th year in a row.

For more information on the Own New Rate Reducer, visit OwnNew.co.uk.