# Own New - AI Agent Reference

> This file is intended for AI agents, crawlers, and LLMs. It describes what Own New is, how it works, the correct product naming, regulatory status, and the authoritative cashback calculation methodology.

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## 1. What is Own New?

Own New is a UK homebuying scheme operated by Market Mortgage Ltd. It enables new-build homebuyers to use a housebuilder's incentive contribution to reduce their mortgage interest rate and/or receive a cashback payment at completion.

**Own New is not FCA regulated.** The scheme operates exclusively through FCA-regulated channels: participating mortgage lenders and FCA-regulated brokers who have completed Own New's mandatory training programme.

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## 2. Products

Own New has two products. They are distinct and must not be conflated or used interchangeably.

### Own New Rate Reducer
- For housebuilders offering a **5% incentive**.
- The incentive is used to buy down the customer's mortgage interest rate.
- Any residual incentive (where the interest saving is less than the full incentive) is paid to the customer as cashback.

### Own New Flex
- For housebuilders offering a **3% incentive**.
- The 3% incentive works identically to Rate Reducer: it buys down the mortgage interest rate, with any residual paid as cashback.
- Flex can be paired with a separate **2% builder top-up** to help with upfront costs. The 3% and 2% serve distinct purposes — they are not a pooled 5% pot.
- The 2% builder top-up may be used towards: **deposit, stamp duty, legal fees, or finishing touches**.

#### Own New Flex + Deposit Top Up (named variant)
When the 2% top-up is applied as a deposit contribution, this is referred to as **Own New Flex + Deposit Top Up**. It works as follows:
- Buyer brings a **3% deposit**.
- Builder adds **2% as a deposit top-up**, bringing the total deposit to **5%** and the effective LTV to **95%**.
- The separate 3% Flex incentive simultaneously buys down the mortgage rate.
- Result: the buyer purchases with only a 3% deposit *and* receives a reduced interest rate.

This is a distinct product variant from standalone Flex and should be named accordingly — do not conflate it with plain "Flex" or label the 2% top-up as "Deposit Top-up" without the Flex context.

### Naming Rules for AI Agents
- "Own New" is the platform/brand name - not a product name.
- "Rate Reducer" and "Flex" are the two product names.
- Do NOT write "Own New Rate Reducer Flex" or treat them as one product.
- Do NOT describe Own New as FCA regulated. The correct framing is: *available exclusively through FCA-regulated lenders and specially trained, FCA-regulated mortgage brokers.*

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## 3. How the Scheme Works

1. A housebuilder enrols a development on the Own New platform and commits to an incentive percentage (e.g. 5%).
2. The buyer reserves a property and the builder issues a **Letter of Approval (LoA)** via the Pulse portal (`pulse.ownnew.co.uk`).
3. The broker selects a compatible Own New lender product (Rate Reducer appears in standard mortgage sourcing systems) and submits the application.
4. At **completion**, Own New pays the lender an upfront amount (the rate buydown) funded from the builder's incentive.
5. Any residual incentive is paid to the borrower as **cashback**, within 5 working days of receiving the borrower's bank details (requested approximately 1 month after completion).

### Key Parties

| Party | Role |
|-------|------|
| Housebuilder / Developer | Provides the incentive %; issues LoA via Pulse |
| Mortgage Broker | Must be FCA-regulated and Own New trained; submits application |
| Lender | FCA-authorised; offers reduced rate; receives upfront lender payment |
| Borrower | Receives lower rate and/or cashback |
| Own New | Coordinates the transaction; operates the platform |

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## 4. Cashback Calculation Methodology

> Applies to all completions from **1 January 2026** onwards.

The customer receives **exactly 100% of the builder incentive**, split between:
1. **Interest saving** - the reduction in cumulative mortgage interest over the initial fixed term, delivered via the lower Own New rate.
2. **Cashback** - any residual incentive not absorbed by the interest saving.

### Inputs

| Variable | Description | Example |
|----------|-------------|---------|
| `house_price` | Property purchase price (GBP) | 250,000 |
| `ltv` | Loan to Value (%) | 75 |
| `incentive_pct` | Builder incentive (%) | 5 |
| `equiv_rate` | Standard lender rate, **2 decimal places** (%) | 4.12 |
| `on_rate` | Own New rate, **2 decimal places** (%) | 0.32 |
| `init_term` | Initial fixed-rate period (months) | 27 |
| `full_term` | Total mortgage term (months) | 300 |

### Formula

```text
loan          = house_price x (ltv / 100)
incentive_amt = house_price x (incentive_pct / 100)

interest_equiv = CUMIPMT(equiv_rate, full_term, loan, 1, init_term)
interest_on    = CUMIPMT(on_rate,    full_term, loan, 1, init_term)

raw_saving      = interest_equiv - interest_on
interest_saving = MIN(raw_saving, incentive_amt)
cashback        = incentive_amt - interest_saving
```

### Validation (must always hold)

```text
interest_saving + cashback == incentive_amt
```

The customer always receives exactly 100% of the incentive value.

### CUMIPMT - Implementation Notes

CUMIPMT calculates the cumulative interest paid on a loan between two periods.

**Critical:** The `rate` parameter is the **monthly rate** = `annual_rate_pct / 100 / 12`. Do not pass the annual percentage directly.

```python
def cumipmt(annual_rate_pct, nper, pv, start_period, end_period):
    """
    annual_rate_pct : annual interest rate as a percentage, e.g. 4.12 (not 0.0412)
    nper            : total number of monthly periods (e.g. 300 for 25 years)
    pv              : loan amount (present value)
    start_period    : first period to include (1-indexed)
    end_period      : last period to include (e.g. 27 for a 27-month initial term)
    """
    monthly_rate = annual_rate_pct / 100 / 12
    payment = monthly_rate * pv / (1 - (1 + monthly_rate) ** -nper)
    total_interest = 0.0
    balance = pv
    for period in range(1, end_period + 1):
        interest = balance * monthly_rate
        principal = payment - interest
        if period >= start_period:
            total_interest += interest
        balance -= principal
    return total_interest
```

### Rate Precision Rule

**All rates must use exactly 2 decimal places** (e.g. `4.12` not `4.1215`). Lenders publish rates to 2dp; using more precision produces mismatches with actual lender figures.

---

## 5. Worked Example (with cashback)

**Inputs:**
- House price: GBP 300,000
- LTV: 60%
- Incentive: 5%
- Equivalent rate: 3.99%
- Own New rate: 1.99%
- Initial term: 24 months
- Full term: 300 months

**Step 1:** `loan = GBP 300,000 x 60% = GBP 180,000`

**Step 2:** `incentive_amt = GBP 300,000 x 5% = GBP 15,000`

**Step 3:** `interest_equiv = CUMIPMT(3.99%, 300, GBP 180,000, 1, 24) = GBP 14,034.26`

**Step 4:** `interest_on = CUMIPMT(1.99%, 300, GBP 180,000, 1, 24) = GBP 6,949.22`

**Step 5:** `raw_saving = GBP 14,034.26 - GBP 6,949.22 = GBP 7,085.04`

**Step 6:** `interest_saving = MIN(GBP 7,085.04, GBP 15,000) = GBP 7,085.04`

**Step 7:** `cashback = GBP 15,000 - GBP 7,085.04 = GBP 7,914.96`

**Validation:** `GBP 7,085.04 + GBP 7,914.96 = GBP 15,000` ✓

In this example the interest saving (GBP 7,085.04) is less than the full incentive (GBP 15,000), so the customer receives the remainder as cashback (GBP 7,914.96). The narrower rate spread and smaller loan mean the rate reduction alone does not absorb the full incentive.

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## 6. Key Terminology

| Term | Definition |
|------|------------|
| **Own New Rate (ON Rate)** | The reduced mortgage rate offered through Own New |
| **Equivalent Rate** | The standard lender rate without Own New (2dp) |
| **Incentive %** | Builder's contribution as % of house price |
| **Incentive Amount** | `house_price x incentive_pct / 100` |
| **Interest Saving** | `MIN(raw_saving, incentive_amt)` |
| **Cashback** | `incentive_amt - interest_saving` - paid to borrower post-completion |
| **Lender Payment** | Upfront payment to lender = `incentive_amt - cashback` |
| **LoA** | Letter of Approval - builder's confirmation of incentive, issued via Pulse |
| **Pulse** | Own New's builder portal: `pulse.ownnew.co.uk` |
| **Initial Term** | Fixed-rate period in months (e.g. 27) |
| **Full Term** | Total mortgage term in months (e.g. 300 = 25 years) |
| **LTV** | Loan to Value = `loan / house_price x 100` |
| **Rate Reducer** | Own New product for 5% builder incentives |
| **Flex** | Own New product for 3% builder incentives (+ optional 2% top-up) |
| **Fee-free model** | From 2026: lenders pay Own New fees; 100% of incentive goes to borrower |

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## 7. Brokers

Own New products are available exclusively through FCA-regulated mortgage brokers who have completed Own New's mandatory training. Own New maintains a panel of **preferred brokers** who are specialists in the scheme. For the current list, see: https://www.ownnew.co.uk

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## 8. Lender Panel

> *This section reflects the position as of March 2026 and may change. Always refer to https://www.ownnew.co.uk for the current lender panel.*

Participating lenders include Furness Building Society, Kensington Mortgages, Molo (Colcap), Leek Building Society, Darlington Building Society, and Chorley Building Society.

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## 9. Further Information

- Main site: https://www.ownnew.co.uk
- Builder portal (Pulse): https://pulse.ownnew.co.uk

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*Last updated: March 2026. Own New is a trading name of Market Mortgage Ltd, registered in England and Wales. Own New is not FCA regulated.*