Best shared ownership mortgage deals

What is a shared ownership mortgage?

Shared ownership is a government-backed scheme that lets you buy a share of a property, usually between 10 percent and 75 percent. You then pay rent on the rest to a housing association. Over time, you can buy more shares in the property if you want to, which is called staircasing.

The scheme is designed to help people who can’t afford to buy a home outright. You’ll still need a mortgage for the part you’re buying, but because you’re only purchasing a share, the deposit required is usually much lower.

The home will be leasehold, and you’ll usually have to pay service charges and ground rent on top of your rent and mortgage payments.

Why choose a shared ownership mortgage?

Shared ownership can offer a few clear benefits:

• Lower deposit and smaller mortgage needed
• Chance to get on the property ladder sooner
• Option to increase your share over time when you're ready

It’s a good option if your income is limited or if you can’t afford to buy in your local area. Because you’re buying a share, your monthly costs could be lower than buying the full property with a standard mortgage.

How shared ownership works

You’ll need to apply through a housing association or local Help to Buy agent. Once you’ve been accepted, you can start looking at available shared ownership homes in your area.

Once you’ve found a home, you’ll apply for a mortgage on the share you want to buy. You’ll also need to budget for your rent, service charges and any other fees that come with the property.

You can usually buy more shares in the future if you can afford to. If you end up owning 100 percent of the home, you’ll no longer have to pay rent.

Who can get a shared ownership mortgage?

Shared ownership is aimed at first-time buyers and those who do not currently own a home. You may also be eligible if you’ve previously owned a home but can no longer afford to buy again.

To qualify, your household income must be less than £80,000 per year, or £90,000 if you live in London. You’ll also need to meet the lender’s usual mortgage checks, which include:

• 3–6 months of payslips
• Recent bank statements
• Details of your monthly outgoings
• Credit history
• Proof of deposit

You will also have to prove that you’re not in mortgage or rent arrears, and that you have a good credit history. As with other mortgages, you’ll be expected to show that you can afford the costs of buying a home and meeting your mortgage repayments.

If you’re over 55, there’s a separate Shared Ownership scheme called Older People’s Shared Ownership (OPSO). If you’re eligible for this scheme, once you own 75% of your home, you no longer have to pay rent on the other 25%.

People with long-term disabilities can apply for Shared Ownership properties if they can't find a suitable home in other Help to Buy schemes (if you need a ground floor property, for example). With this scheme, you can buy a share of between 10% and 75% of the value of your home. This is called Home Ownership for People with Long-Term Disabilities (HOLD).

If you’re self-employed, you’ll need to provide tax returns or business accounts.

How to find the best shared ownership mortgage deals

Not all lenders offer shared ownership mortgages, so it’s important to compare your options. We work with over 90 lenders and can help you find the best deal for your circumstances.

Some lenders offer fixed rate deals for shared ownership, while others offer variable or tracker options. Our expert advisers can explain how they work and help you choose the right one.

Use our best buy tables to see the top shared ownership mortgage rates, then apply online or speak to us to get started.

Making repayments on a shared ownership mortgage

Your monthly costs will include your mortgage payment, rent on the share you don’t own and any service charges. The amount you pay will depend on the size of your share and the terms of your agreement with the housing association.

If you decide to buy more of the property later on, your rent will go down as your ownership share goes up. If you reach full ownership, you’ll no longer pay rent but will still be responsible for service charges if your property is leasehold.