A Shared Ownership home is a way for buyers to get on the property ladder with less initial investment required than buying a home outright on the open market. 

This is because Shared Ownership buyers purchase a share of a property’s full value, which is typically far lower than the cost of buying a full home. They’ll often need to secure a Shared Ownership mortgage in order to purchase their share. 

But how does a Shared Ownership mortgage differ from a standard mortgage? And how much will it cost, especially when factoring in the rent you’ll pay on a Shared Ownership home? 

As the experts for all things Shared Ownership, we’re here to clear up any confusion and get you on the right track towards owning your own home. 

What is a Shared Ownership mortgage? 

A Shared Ownership mortgage is required by buyers to purchase their share of a Shared Ownership home. This is the case whether you’re looking to buy a 25% share, or even as high as a 75% share. 

You’ll pay a mortgage on the shares that you own, and then pay rent to the housing association on the shares owned by them. This is typically charged at around 2.75% of the unowned shares but can range, and while the combination of rent and a mortgage might seem like it would outweigh the benefits of Shared Ownership, this sometimes can typically works out cheaper than renting privately. 

Here’s an example of how this breaks down on a 25% share of a £200,000 home: 

• The value of your share: £50,000
• Deposit required based on 5%: £2,500
• Value of portion owned by the housing association: £150,000
• Value of mortgage required: £47,500

What types of Shared Ownership mortgages exist? 

As with standard home mortgages, you’ll often find two kinds of Shared Ownership mortgages that will appeal to different kinds of people: 

• Fixed rate: Your payments will be fixed at a certain percentage, typically for two to 10 years. You’ll know exactly what you’re paying each month for the duration of your fixed rate
• Variable: Your payments will fluctuate depending on the interest rate of your mortgage. This could cause lower payments one month, and higher monthly costs the next

Can I obtain a Shared Ownership home without a mortgage? 

In certain circumstances, it is possible to purchase your share in a home without the use of a Shared Ownership mortgage. This may be the case if: 

• You are unable to obtain a Shared Ownership mortgage, or
• There is no mortgage product suitable for your situation

In these cases, you could purchase your share of the home using cash. Our experts will be able to talk you through any questions you may have about this process. 

Shared Ownership mortgage lenders

Once you’ve obtained a mortgage in principle, you need to work with your broker or lender to secure a mortgage and proceed with your Shared Ownership purchase. 

You might think that Shared Ownership mortgage lenders are few and far between, but the reality may be surprising: more than 20 high street names offer Shared Ownership mortgages to help you get on the property ladder.  

This includes (but isn’t limited to) Kent Reliance, Nationwide, Barclays, Leeds Building Society, Skipton Building Society and Halifax. All of these lenders have professionals knowledgeable about Shared Ownership, and they can work with you to obtain your mortgage and get on the property ladder. 

Calculating your Shared Ownership mortgage

Having an awareness of your outgoings is essential for living comfortably. When it comes to a Shared Ownership home, this means knowing how your rent, service fees, and mortgage contribute to the total cost of owning your share of the home. 

You can use our handy Shared Ownership mortgage calculator to work out roughly how much you’ll be paying each month for your Shared Ownership home. To get an estimated figure on monthly rent and mortgage costs, you simply need to provide: 

• Proposed property value
• Mortgage period
• Deposit you’re able to provide
• Share of the home you’re aiming to buy

Ready to start your Shared Ownership journey? 

If you think that a Shared Ownership home could be right for you, we’ve got lots of properties around the country ready for you to move in. To learn more, reach out to our helpful team and get on the property ladder sooner.