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Buying at a fixed price with a down payment now and a mortgage later

Where a mortgage is not available today and the property is, a structured purchase fixes the price now, puts you in the building on a down payment, and gives you a defined period to arrange the financing. It is not cheaper than a mortgage and it is not meant to be. What it buys is time and a price that cannot move. This prices it honestly, including what happens if the mortgage never arrives.

For: Somebody who cannot get a mortgage today but can pay for the property

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The arrangement
£
Agreed now and payable at the end. It is normally at or a little above today's open market value, because the seller is giving up the right to sell to anybody else in the meantime.
%
£24,000. Paid on the day you move in, and it is the seller's compensation for taking the property off the market for 24 months.
£
Usually a little above the market rent for the property, because you have the exclusive right to buy it and the seller is carrying the mortgage in the meantime.
mo
Long enough to fix whatever is stopping the mortgage today: a default falling off the file, two years of accounts, a visa, or a deposit that is not there yet.
%
Whether part of each monthly payment comes off the completion price. Negotiable, and it is the single most valuable term in the agreement. Get it in writing or assume it is nothing.
What you would do instead
A structured purchase only makes sense against the honest alternative, which is renting and saving.
£
%
This is the number the whole arrangement turns on. If prices rise, the fixed price is worth real money. If they fall, you have agreed to pay above the market and the option is worth nothing.
%
The mortgage at the end
%
Ninety five per cent exists and is priced accordingly. The more of the price the down payment and the credits cover, the better the rate you land on.
%
At this loan to value the sharpest five year fix today is 4.79%. Rates in two years are nobody's to promise.
yr
You would be short on completion£216,000£24,000 down now, £1,250 a month for 24 months, then £216,000 to complete at the price fixed today. A 85% mortgage on the fixed price advances £204,000, which leaves you £12,000 short. That gap has to come from savings, from a larger down payment, or from a longer term.
£24,000Down payment
£1,250Monthly
£30,000Paid over the term
£54,000At risk if you cannot complete
£14,616Price protection
Down payment9%Monthly payments11%Balance on completion80%
What you pay, and when
On the day you move in£24,000
10.0% of the fixed price, plus your own legal costs on the agreement.
Every month£1,250
£150 more than the £1,100 of rent you would otherwise pay. That premium is what you are paying for the fixed price and the exclusive right to buy.
Over the whole term£30,000
None of it comes off the price, so all of it is the cost of occupying it. This is the term worth negotiating hardest.
On completion£218,400
£216,000 of balance plus £0 of stamp duty and about £2,400 of legal and survey costs. Stamp duty is payable at completion, not at the start.
Total outlay across the period£54,000
Against £26,400 of rent over the same 24 months.
Can you actually complete?
A 85% mortgage on the fixed price£204,000
Short by£12,000
Raise the down payment, negotiate a share of the monthly payments off the price, or save £500 a month alongside the payments. Finding this out at the end is the thing to avoid.
Payment once the mortgage is in place£1,064
4.75% over 30 years on £204,000. That is -£186 less than you are paying now.
Against renting and saving
What you would have saved instead£29,737
The same £24,000 plus £150 a month, at 4.00%.
What the property would cost by then£254,616
At 3.0% a year for 24 months.
Deposit that would be11.7%
Short of the 15% you would need at that price. The structured route gets you in now and fixes the price while you close the gap.
What the fixed price is worth£14,616
The property would cost £254,616 on the open market by then and you have agreed £240,000. That gain is yours, and it is the whole economic case for the arrangement.
The risk, stated plainly
At risk if the mortgage never arrives£54,000
The down payment and every monthly payment. You hold a right to buy rather than an obligation, so you can walk away, and walking away means losing this. Nobody should enter one of these without a realistic and written plan for the mortgage at the end of it.
Equity on day one of ownership£38,616
The property's value at completion less the balance you owed. On a fixed price in a rising market this is where the arrangement pays.
Where these figures come from

Rates. Best buy remortgage and purchase rates as at early September 2026, from 4.50% at 60% loan to value to 5.25% at 95%. Bank Rate is 3.75%.

Stamp duty at England and Northern Ireland rates, payable on completion at the fixed price. First-time buyer relief runs to £300,000 and is withdrawn entirely above £500,000.

The comparison assumes the same money either goes into the down payment and monthly premium, or into a savings account earning the rate you set, while you pay the rent you set.

A structured purchase gives you a right to buy rather than an obligation, which is what makes the down payment and the monthly payments capable of being lost. That is the risk you carry and it is the reason the price can be fixed. It is not cheaper than a mortgage, and anybody presenting it as a cheap route onto the ladder is describing something else. The agreement should be drawn by solicitors, registered against the title so the seller cannot sell to somebody else, and it should say plainly what happens if you cannot complete, what happens if the seller's own lender repossesses, and whether any part of the monthly payment comes off the price. Take independent legal advice before signing anything. An estimate, not advice and not an offer.

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