What is a shared ownership mortgage?

Shared ownership is a type of mortgage. It’s different to a residential mortgage, as instead of buying the whole property, you buy a share. You’ll pay a mortgage on your share, then pay rent on the rest.

A shared ownership mortgage can be a good choice if you’re a first-time buyer as saving a big deposit can be tricky. Shared ownership mortgages are also known as ‘part buy, part rent’ mortgages and are offered by housing associations such as Moat Homes.

Shared ownership mortgages could allow you to buy between 25% and 75% of a property with a housing association, paying rent on the rest. To get started, all you need is a 5% deposit towards the part of the home you’re buying.

Who can get a shared ownership mortgage?

Shared ownership mortgages are available to people living permanently in the UK who are:

• First time buyers.
• Previous homeowners that now can’t afford to buy.
• People who already live in a shared ownership home.
• People who are renting a council or housing association property.
• Households that earn less than £80,000. The limit goes up to £90,000 if you live in London.

How do I apply for a shared ownership mortgage?

Don’t worry, it’s easy to get started. Simply contact your nearest housing association to apply for the shared ownership scheme and seek financial advice from an experienced mortgage broker.

You’ll be asked questions about your:

• Income
• Savings
• Credit history
• Preferred location

The amount you can borrow will normally depend on your:

• Income
• Mortgage cost
• Rent
• Service charges
• Ground rent

Once you’ve been accepted it’s time to get excited as you can start looking for your new home.

Can you buy a shared ownership house outright?

You can buy a bigger percentage of your home at any time. This is called ‘staircasing’ you can find more information on our shared ownership page.

You may be able to buy a 10% share of the overall value of your shared ownership home. To buy any bigger percentage than that, you may have to pay extra. The amount you’ll have to pay to increase your share depends on how much your home is worth. You can find this out by paying the housing association to carry out a valuation.

How does shared ownership work when you sell your home?

It’s worth knowing that the housing association will have the first option to sell your property before you do. This is called ‘first refusal’ and means they can find their own buyer if they want to. This is also the case if you don’t own a full share of your property at the end of your tenancy.

Want to explore your options?

Speak to our team of mortgage experts today to find out more about shared ownership mortgages and if they are the right option for you; simply call us on 01634 968111 or book your appointment online.