What we cover in this guide
- How does Shared Ownership work?
- What criteria need to be met to qualify?
- Can I remortgage a Shared Ownership property?
- How are Shared Ownership mortgages different?
- Shared Ownership considerations
- How to find a Shared Ownership mortgage?
- Shared Ownership mortgage lenders
- What are Shared Ownership mortgage rates?
- Shared Ownership mortgage specialists
How does Shared Ownership work?
Not all mortgage lenders want to get involved with Shared Ownership mortgages, and you could waste a lot of time shopping around until you found one that would look at your application. At The Mortgage Centres, we have advisors who are specialists in the Shared Ownership mortgage area and know exactly which lenders to deal with. We’ll also be able to help you prepare your application thoroughly, so that lenders will understand you have planned for all the costs involved and will meet their affordability criteria.
With our help, you’ll be on the road to getting the right Shared Ownership mortgage to meet your circumstances and get you onto the home you’ve dreamt of.
You’ll find there are many different types of Shared Ownership mortgage, each designed to help a specific kind of buyer take the first step to owning their home.
Shared Ownership mortgage lenders
With Shared Ownership mortgages being slightly complicated, many lenders are unwilling to consider them, meaning the range of lenders available are limited.
The mortgage market is very dynamic and constantly changing. Lenders and the types of deals they will offer vary from day to day. Therefore, it would be impractical to compile a list here. Your best option will always be to consult with a specialist mortgage broker, who will be able to outline your options.
Shared Ownership mortgage rates
As with standard mortgages, the best scheme for you may not always be the one with the cheapest headline interest rate. It’s also a good idea to study your options carefully, allowing for the anticipated lifetime of the mortgage.
- Shared Ownership mortgages are usually distinct products offered by specialist lenders. So, their rates will be costed differently to their range of standard mortgages. As ever, the level of deposit that you can provide will have a bearing on the deals available. Having a higher deposit usually opens the door to a more favourable interest rate.
- As Shared Ownership mortgage rates change over time, we are unable to list typical rates here. But you should study the monthly and annual costs associated with the deal. As well as the anticipated rent payments on the portion of the home owned by another party.
Shared Ownership FAQs
- What types of Shared Ownership properties can I buy?
- What is the minimum Shared Ownership share I can purchase?
- What is the maximum Shared Ownership share I can buy?
- When can I buy more Shared Ownership shares?
- How is Shared Ownership rent calculated?
You can buy both existing and new-build Shared Ownerships properties under the scheme. Providing they are owned by an approved qualifying body. In most cases, the approved body will be a Housing Association or local authority. But you might also find properties available through housing action trusts, the Northern Ireland Housing Executive, the Commission for the New Towns and some development corporations.
The original Shared Ownership scheme stated you must purchase a minimum share of 25%. Although the updated scheme announced you can own as little as 10%.
The maximum share of the property you can buy under the Shared Ownership scheme is 75%. If you are an older person and reach this stage, you will not have to pay rent on the remaining share.
If you increase your share to 100%, you will own the property leasehold outright. But you may still need to coordinate with the Housing Association, local authority, or other approved body if you plan to sell it.
When you buy additional shares of your property, be aware that the cost will be at the prevailing market rate. If you already own 25% and buy another 25% then the price will be higher if the property value has gone up. Likewise, it will be cheaper if the property value has decreased.
The Government does not place any time restrictions on when you will be able to buy a greater share. However, local authorities or Housing Associations may have their own individual rules. And they may impose other staircasing restrictions.
Individual local authorities or Housing Associations will each define their own methods to calculate your rent. But the typical annual figure is based on 3% of their ‘retained equity’ in your home.
‘Retained equity’ is the approved body’s portion of the Shared Ownership property.