New Build Boost was launched in March as an alternative to Help to Buy, with buyers bringing a 5% deposit taking an 80% mortgage with Gen H and receiving an interest-free five-year equity loan 15% boost.
The firm said that currently, around 94% of New Build Boost applicants have been first-time buyers, with ages ranging from 19 to 52.
Gen H said the cut would make the product more accessible for thousands more aspiring homebuyers.
For instance, for a borrower with a 5% deposit, a £300,000 home mortgaged over 30 years would cost £1,431 per month with New Build Boost. On the current best buy 95% loan-to-value (LTV) rate of 4.78%, the monthly payment would be £1,492 per month.
On the current best buy 90% LTV rate of 4.4%, assuming a 5% gifted deposit from the builder, the monthly payment would be £1,352. But compared with a 90% LTV, with New Build Boost, purchase power is boosted by over 12% – even though it’s only £79 per month more expensive in this scenario.
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Pete Dockar, chief commercial officer at Gen H, said: “The feedback we’ve been getting from New Build Boost brokers was overwhelmingly positive, but it came with an ask: make the New Build Boost rate begin with a ‘5’.
“I’m delighted that we’ve found a way to make it work and am excited to see more New Build Boost homeowners join our books. The scheme supports people with no other path onto the property ladder, so every single completion is a huge win for our mission-driven team.”
