Shared ownership mortgages
Shared ownership mortgages are offered by housing associations and allow people to part-buy and part-rent their home. The person moving into the home will buy a share of the chosen property (usually between 25% and 75% of the property’s value) and will take out a shared ownership mortgage for this percentage. They’ll then pay an affordable rent to the housing association on the remainder of the property’s value.
need to know…
Who qualifies for shared ownership?
You should be eligible to purchase a home through the shared ownership scheme if your household income is £60,000 or less. Unlike many other housing schemes, you don’t technically have to be a first-time-buyer to access a shared ownership mortgage. Previous homeowners may be able to use the scheme if they cannot afford to buy a property now. You may also be eligible if you’re renting a council or housing association property.
What are the advantages and disadvantages?
Shared ownership schemes can be a great way for people to get on the property ladder, particularly if they’re unable to buy a house the traditional way. In some cases, the shared ownership scheme can enable homebuyers to purchase a bigger home than they would be able to afford ordinarily.
However, since you don’t own the property outright, if you wish to make home improvements, you may need to request permission from the housing association beforehand.
Shared ownership mortgages allow you to purchase a percentage of a property. While most properties require you to put down a deposit of 10-20% of the home’s value, most shared ownership schemes require as little as a 5% deposit. You’ll pay mortgage repayments on a percentage of your new home’s value and rent on the rest.
Our online mortgage calculators have been designed to help you with the most common mortgage questions such as ‘how much can I borrow?’ and ‘how much will it cost?’
To get a more accurate idea we recommend that you speak to one of our expert mortgage advisers.
A fixed rate mortgage charges a set rate of interest for a predetermined period. Once this period is over, the interest rate usually revers to the lender’s Standard Variable Rate (SVR).
Trackers are a type of variable rate mortgage which see interest rates rising and falling based on the Bank of England’s base rate. However, unlike traditional variable rate mortgages, a tracker mortgage doesn’t have to match the Bank of England’s rate exactly. Instead, the rate the borrower is charged is likely to be a little above the base rate.
An offset mortgage links the borrower’s savings to their mortgage balance. By choosing an offset mortgage, homeowners can reduce the amount of interest charged and potentially pay off the mortgage sooner.
A cashback mortgage pays the borrower an upfront lump sum. This can enable them to pay for a costly expense such as home furnishings, a car or university tuition fees. The rate paid tends to be based on the bank's Standard Variable Rate (SVR).
A discount rate mortgage offers borrowers a reduction on the lender’s Standard Variable Rate (SVR) for a set period of time. The rate can fluctuate and so although the borrower will repay less than the SVR, their repayments could rise or fall.
A variable rate mortgage sees the interest owed rise or fall depending on the base rates set by the bank. When the base rate is low, borrowers may benefit from extremely low mortgage repayments. However, if the base rate increases, so too will the amount borrowers are expected to pay in interest.
When a homeowner has an interest only mortgage, they won’t pay traditional mortgage payments each month. Instead, they’ll only repay the interest that is due. At the end of the mortgage term, the homeowner will be expected to pay the property’s value in full.
A capped rate mortgage offers similar security to a fixed rate mortgage. The rate payable will be capped for the duration of an agreed upon period of time. During this time, the rate may rise or fall in line with market fluctuations, but it will never exceed the capped rate.
As a result, a capped rate mortgage enables borrowers to benefit from falling rates without placing strain on their budget as a result of unaffordable increases.
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With access to a comprehensive range of first charge mortgages and protection, we can deliver a complete range of flexible mortgage solutions to fit your exact requirements.
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