Heron Financial arranged a £395,000 mortgage at 82% LTV for joint home movers in Kent, one working in engineering inspection, the other as an education professional, purchasing a £480,000 three-bedroom semi-detached new-build house. The £85,000 deposit combined £61,000 of equity from the sale of the existing home with a £24,000 builder gifted deposit, landing the case inside the 85% LTV pricing tier rather than higher. Heron Financial placed the case with Danske Bank, and the mortgage completed in May 2026.
The clients
The clients were a couple in Kent upsizing from their existing home into a new-build semi-detached house. One applicant works in engineering inspection; the other is an education professional. Both are paid through PAYE, with steady evidenced income.
They came to Heron Financial with a clear plan and a sensible deposit structure: £61,000 of equity rolling out of the sale of their current home, topped up by a £24,000 gifted deposit from the housebuilder as part of the new-build purchase incentive. The £85,000 combined deposit on a £480,000 purchase put the case at just under 82% LTV, and crucially, just inside the 85% LTV pricing tier rather than the more expensive 90% LTV one.
The case at a glance
- Buyers: Joint home movers, employed
- Nationality: British
- Occupations: Engineering inspection professional + education professional
- Property type: Three-bedroom semi-detached new-build house
- Location: Kent
- Purchase price: £480,000
- Deposit: £85,000 total, £61,000 from property sale plus £24,000 builder gifted deposit (approx. 18%)
- Loan amount: £395,000
- LTV: 82% (82.29% specifically)
- Lender: Danske Bank
- Repayment method: Capital and interest
- Scheme / incentive: Builder gifted deposit (new-build incentive)
- Completion: May 2026
The challenge
There’s a quiet bit of strategy in this case that’s worth pulling out.
The builder gift drops the case into a better LTV band. On the £61,000 of sale proceeds alone, the case would have sat at 87% LTV, inside the 90% LTV pricing tier on most lender ranges. Adding the £24,000 builder gift took the deposit to £85,000 and the LTV to 82.29%, dropping the case into the 85% LTV pricing tier. That’s a meaningfully better tier on rate. The strategic use of the builder gift was the difference between two distinct pricing bands.
Builder gifted deposit treatment varies by lender. This is the technical point. Some lenders count the builder’s gifted contribution towards the deposit at face value, calculating LTV against the full purchase price, which is what preserved the 82% LTV outcome on this case. Other lenders deduct the gift from the purchase price and recalculate LTV against the lower figure, which would have pushed the LTV up and wiped out the band benefit. Lender choice was the deciding factor.
Joint affordability for a £395,000 loan on two PAYE incomes. On standard 4.5x lending, £395,000 implies combined income of c.£87,000+. Engineering inspection and education professional roles are both well-treated by mainstream lenders, with steady PAYE income. Lender choice depended on the income multiple working cleanly at the loan size.
Sale and purchase coordination. £61,000 of equity from the sale of the existing home needed to flow cleanly into the new deposit at exchange. The chain timing, exchange dates and completion alignment all had to work in step.
New-build at this value. £480,000 sits comfortably within mainstream new-build lender criteria. Site exposure limits, builder warranty (NHBC or equivalent) and offer validity through to the builder’s longstop completion date all needed to be in order, routine on a clean new-build but worth confirming up front.
How Heron Financial approached the recommendation
The Heron adviser focused on lender treatment of the builder gift first, because that decided whether the LTV band benefit held.
Lender mapping for builder gift treatment. Heron Financial narrowed the panel to lenders that count builder gifted deposits towards the deposit at face value, so the case held at 82% LTV against the full purchase price rather than being pushed higher.
Joint affordability check. The adviser confirmed how the chosen lender would treat the two PAYE incomes, basic pay plus any regular variable elements, to ensure the £395,000 loan sat comfortably within affordability.
Sale coordination. The mortgage offer was structured to align with the sale completion of the existing property, so the £61,000 of equity flowed cleanly into the new deposit at exchange.
Lender choice. Danske Bank was the right home for this case. They have workable criteria on builder gifted deposits, take a clean approach to joint employed incomes on home mover cases, and offered competitive pricing at the 85% LTV band for the loan size. They’re not always the first lender borrowers think to approach directly, which is part of where the broker added value here.
Product choice. A fixed rate gave the clients payment certainty in the early years of the new home, particularly valuable on a meaningful loan when the household has just absorbed the costs of moving and is settling into the upsize.
The outcome
The mortgage completed in May 2026. The clients moved into their new home with:
A £395,000 mortgage at 82% LTV
A fixed rate on capital and interest repayment
Both deposit sources cleanly deployed
A lender outcome that preserved the LTV band benefit from the builder gift
A clean coordination between sale and purchase completions
What this means for buyers in a similar position
If you’re a home mover buying a new-build with a builder incentive on offer, don’t treat the gift as “free money for the same outcome”. Think about which LTV band your sale equity alone would put you in, and which band you’d land in once the gift is added. Crossing from 90% to 85% LTV, or from 85% to 80%, often unlocks a materially better rate on the same out-of-pocket position. The catch: only some lenders treat builder gifted deposits in the way that preserves the LTV benefit. Others deduct the gift from the purchase price and recalculate LTV against the lower figure, quietly wiping out the saving. A broker who knows each lender’s policy is the difference between a strategic LTV benefit and an incidental one.
FAQs
How does a builder gifted deposit work on a new-build mortgage?
A builder gifted deposit is a contribution from the housebuilder, typically 5% of the purchase price, that goes towards the buyer’s deposit. The buyer still needs their own savings (or sale equity) to make up the rest. The gift is not a loan and is not repayable. How lenders treat the gift varies and affects the final LTV.
Does a builder gifted deposit affect the LTV calculation?
It depends on the lender. Some count the builder’s gift towards the deposit at face value, so LTV is calculated against the full purchase price. Others deduct the gift from the purchase price and recalculate LTV against the lower figure, which can push the case above the lender’s LTV cap. Lender choice matters specifically for this reason.
Can I use a builder gifted deposit to drop into a better LTV band?
Yes, with the right lender. If your own deposit (savings or sale equity) puts you at, say, 87% LTV, and adding a builder gift would take you to 82% LTV, a lender that counts the gift at face value will price the mortgage at 85% LTV — typically a better rate. This is one of the most underused strategic uses of new-build incentives.
Can I combine sale proceeds and a builder gifted deposit?
Yes. A deposit made up of sale equity plus a builder gifted contribution is a common structure for home movers buying new-build. Each source is documented in its own right, the sale completion provides the equity, and the builder discloses the gift through standard new-build incentive paperwork. Combined together, they form the deposit on the purchase.
Is 82% LTV a good band to land in?
It’s a workable band. 82% LTV sits just inside the 85% LTV pricing tier, meaningfully better than 90% LTV, but not as sharp as 75% or 60%. For home movers stretching to upsize into a new-build family home, 85% LTV pricing is often the realistic target band, and strategic use of a builder gift can be the lever that gets you there.
