Shared Ownership Mortgages Explained
Shared ownership mortgages are used for part buy, part rent schemes commonly known as affordable housing.
These type of mortgage scheme are popular with first-time buyers because they only need to find a fraction of the deposit and mortgage amount needed to buy a similar property on the open market. Typically lenders will offer mortgages up to 95% of the share purchased.
When you buy a shared ownership property, you only buy a percentage stake in the property, usually 25 to 50 per cent – from a housing association. Although this can be affordable, as you only own a percentage of the property you will miss out on some of the equity growth if the housing market rises.
You can, however, staircase‘ which means buying another portion of the property later on.
Many of these shared ownership schemes, which often offer properties at a discount, are open to all comers through housing associations. Shared ownership mortgage schemes vary form lender to lender with some lending up to 100% loan to value on the purchased share.
Your home may be repossessed if you do not keep up repayments on your mortgage
