What is a shared ownership mortgage?
A shared ownership mortgage is a lower cost way to buy a newly built home or an existing one through resale programmes from housing associations.
You take out a mortgage to pay for a share of the home’s purchase price usually between 25% and 75% of its value, and any deposit will be 5-10% of the price of the share, not the full market value. You then pay rent to the housing association for the share you do not own.
It is possible to remortgage when the term of the mortgage ends. You can also buy more shares of the property as you can afford it to eventually own 100% of the property. Shared Ownership properties are always leasehold.
Frequently asked questions
Is shared ownership cheaper than renting?
Shared ownership is a lower cost way of buying a property where you make mortgage repayments on the share of the property you own and rent on the share still owned by the housing association. This may or may not be cheaper than renting as regional differences for rent and purchase apply. However, you will own a part of your home, which could go up in value, unlike renting where you never own your own home and will be covering the landlord’s expenses.
Can you own 100% of a shared ownership house?
Yes, you can buy more shares of the property as you can afford to do so, which is known as staircasing, until you eventually own 100% of your home and will no longer pay rent just the mortgage until that has been repaid.
What salary do you need for shared ownership?
Your household income is capped at £80,000 a year or less outside of London or £90,000 a year or less in London.
What is staircasing?
Staircasing is where you buy more shares of the property as you can afford it, eventually owning 100% of the property.
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