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Shared ownership mortgages

Looking for a mortgage on a Shared Ownership property? Get the right advice here.

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Shared Ownership mortgages

We’ve been approached by lots of people who want to know more about how they can get a Shared Ownership mortgage in the UK.

In this article we’ll tell you the key information  about Shared Ownership and how it could help you get onto the property ladder quicker, and potentially with a lower deposit in comparison to a standard mortgage. 

The following topics are covered below…

  • Shared ownership mortgages explained
  • Shared Ownership mortgage advantages and disadvantages
  • Who is eligible for Shared Ownership?
  • How does Shared Ownership mortgage work?
  • Do you pay mortgage and rent on a Shared Ownership property?
  • How much can you borrow?
  • How much deposit will you need?
  • How many shares can you get with a Shared Ownership mortgage?
  • How to get a Shared Ownership mortgage
  • Getting a shared ownership mortgage with bad credit
  • FAQ section
  • Why you should speak to a Shared Ownership mortgage broker
  • Contact and expert


Shared ownership mortgages explained

Many people come to us asking, “What is a Shared Ownership mortgage?” so we’ll start with a basic definition…

Shared Ownership schemes are a cross between buying and renting and are usually aimed at first time buyers.

If you are eligible, you can purchase a percentage of the property, usually between 25-75% and then pay rent on the percentage of the property that you do not own, usually to a local council or housing association.

By purchasing a percentage of the home, you can apply for a smaller mortgage. This is often why Shared Ownership mortgages appeal to house buyers, as with a smaller loan, they are more affordable.

As well as this, the deposit for a Shared Ownership property can be a lot less in comparison to a deposit for owning and buying a whole property.

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Shared Ownership mortgage advantages and disadvantages

Now that we’ve covered the meaning of the term ‘Shared Ownership mortgage’, it’s time to explore their pros and cons to help you determine whether one is right for you.

To decide whether a Shared Ownership mortgage is a good idea or worth it for you, you really need to talk to a mortgage advisor who can listen to what you want from a mortgage whilst looking at your finances and other affordability factors.

To give you an idea of how this type of mortgage could affect you, we’ve listed the pros and cons of a Shared Ownership mortgage.



●     Shared Ownership provides a cheaper alternative to buying a property

●     A smaller deposit of 5% is often required on a Shared Ownership mortgage because the buyer is purchasing less equity


●     The buyer only purchases shares that are affordable to them between 25-75% of the properties value


●     Shared ownership is always a leasehold purchase which means that you only own the property for a fixed length of time. (Usually 99 years.) Once the lease has ended, the ownership reverts back to the landlord


●     You may have to pay a service charge


●     You will be responsible for repairs and maintenance and will need written permission for home improvements

Who is eligible for Shared Ownership?

People often ask us, “Can I get a Shared Ownership mortgage?”

You may be eligible for a Shared Ownership mortgage for a property, be it a house or a flat, if the following apply to you:

  • You are a first-time buyer, or have owned a home previously but can no longer afford a mortgage
  • You have a combined income of less than £80,000 if you live outside of London, and less than £90,000 if you live in the capital
  • You plan to live in the property and not rent out any part of it
  • Have the permanent right to live in the UK
  • Are 18 years old or over

How does Shared Ownership mortgage work?

Shared Ownership is usually, but not always, offered on new build properties built by a housing association or private developer. When you buy shares, the housing association own the remainder of the shares you have not purchased.

Do you pay mortgage and rent on a Shared Ownership property?

Yes. As well as paying for your mortgage for the percentage of the property you own, in a Shared Ownership, you are also required to pay rent on the percentage of the property that you do not own. The rent on a Shared Ownership property is generally calculated at 3% of the equity owned by the landlord.

For example, if the property is worth £200,000 and the share owned by the leaseholder is 50%, the rent will be 3% of  £100,000 (the remaining share held by the landlord.) This would equate to £3,000 which would be payable over 12 months at £250 per month.

Therefore in most cases, the more equity you own, the cheaper the rent payable to the landlord / housing association each month.

Property price of £200,000

Your share as a percentage

Your share as GBP

Landlord’s  share as GBP

Yearly rent

Monthly rent in GBP
















Furthermore, if stated in your lease, your the percentage of rent can increase each year in lines with inflation.

How much can you borrow on a Shared Ownership mortgage?

The criteria for a Shared Ownership mortgage is fairly flexible in terms of lending high loan to values to people with bad credit and other financial issues. But how much mortgage can you afford to get with Shared Ownership?

Well, this will largely depend on your income. You will need to show that you can afford the mortgage, rental payments and other costs that may arise such as repairs and maintenance. You’ll also need to prove that you have enough deposit to put down which can vary depending on the lender.

Every lender has a different level of generosity when it comes to how much they will consider lending you and the criteria they use to assess your affordability will vary..

Usually though, most lenders provide loans at 3-4x your income, although some lenders may consider loaning 5x your income, and in the right circumstances, few may offer 6x your income.

Income multiples

Loan amount









Keep in mind that you will only need to qualify for a mortgage that covers your ownership percentage of the property, rather than its entire market value, so the income multiple you need will not be as high as it would for a standard mortgage application.

For more information on how your income can affect how much you can borrow, speak to an advisor here.

How much deposit will you need?

A great appeal to many buyers is that often the deposit required for this type of mortgage is low. In fact, there are lenders who offer Shared Ownership mortgages with a 5% deposit.

Another benefit of Shared Ownership is that the deposit is calculated based on the percentage of the purchase price of the share that you own (not the total property value).

For example if a buyer wished to purchase 25% of a property worth £200,000 and they were able to pay a 5%  Shared Ownership mortgage deposit (£2,500), they would need to apply for a mortgage for £47,500.

Although it is possible to get a Shared Ownership mortgage with only 5% deposit, if you are able to put down more, it is often beneficial to do so, especially if factors such as a bad credit rating make the deal high risk in the eyes of the lender.

How many shares can you get with a Shared Ownership mortgage?

If you are buying your home through a private Shared Ownership developer, the amount of equity (shares) you own in a Shared Ownership mortgage is usually up to you (as long as you have the finance and can afford the repayments.)

The only exception to this is if you’re buying a property through Help to Buy: Shared Ownership, which is a government scheme that allows you to buy between 25 – 75% of the properties value.

To give you an example about how much a share could be and how this can affect your mortgage amount, please see the table below

Property price of £200,000

Share Percentage of Shared Ownership mortgage

Share as GBP

Deposit amount (5%)

Mortgage amount

























Can you buy more shares later?

Yes. If you want to increase the amount of shares you own in the property and you can afford to do so, you can. In fact, in most cases you can purchase up to 100% of the property’s value, meaning that you could eventually hold the full equity of the property.

How do you buy more shares?

  • Contact the housing association or the organisation you have bought the property from
  • Inform them about how many shares you would like to buy
  • Have the property revalued (the value of the property may have increased or decreased and this could affect the price of each share)
  • Purchase more shares (By adding to your existing mortgage, remortgaging or using savings)

How to get a Shared Ownership mortgage

To start the process of getting a Shared Ownership mortgage, speak to a mortgage advisor who can search for developers in your area that are taking part in the scheme.

They will then calculate how much mortgage each lender may give you and under what conditions. A mortgage advisor can guide you through the whole process from start to end and find you the best rates for your circumstances.

Getting a shared ownership mortgage with bad credit

Over the years, we’ve helped lots of homeowners onto the property ladder  through Shared Ownership, even in cases where the borrower(s) have “bad credit” or debt.

Some examples of this include:

  • Low credit score
  • Late payments
  • Mortgage arrears
  • Defaults
  • CCJs
  • Debt management plans
  • IVA
  • Bankruptcy
  • Repossession

Depending on your circumstances, it may be possible to get a Shared Ownership mortgage because every lender has different rules about how they measure a borrower’s likelihood to default on their mortgage.

In fact, there are lenders who consider borrowers with poor credit and a few deals for customers will low income and little deposit Typically you would expect to pay a higher rate of interest with mortgages like this, as all lending is based on risk. If you have “bad credit” with no deposit, this won’t offer the most attractive proposition for a lender.

Every lender is different when it comes to what they will and won’t accept as “bad credit” too. For example, one lender using Experian may decline you for a low credit score, whilst another lender using Equifax might approve you.

Getting help from a specialist

With so many uncertainties, it can be helpful to seek advice from a mortgage broker.

Not only can they provide you with a free credit check on each of the main credit reference agencies but they can also find the best lenders within the market who are more likely to approve a Shared Ownership mortgage for someone with your specific type of “bad credit.”

Contact a “bad credit” mortgage specialist here to find a mortgage that’s right for you. Alternatively, see our bad credit information section.


Can you get a shared ownership Buy to Let mortgage?

No. Shared Ownership is only available to buyers that  plan to live in the property and not rent out any part of it. If you want to let your first property out, you will need a Buy to Let mortgage. These can be harder to get for a first time buyer though and often require larger deposits of around 25-30%.

See out Buy to Let mortgage section for more information.

Do you need a guarantor for a shared ownership mortgage?

No. For a lender to be confident that you can afford your mortgage and rent payments, you will need a deposit (often 5%.)

Can you get a Shared Ownership mortgage on a new build?

Yes, in fact most Shared Ownership schemes are offered on new build properties.

Can you get a Shared Ownership mortgage on your own?

If you can prove that you are able to afford a mortgage on your own as well as the rental payments and any other outgoings you have, then Shared Ownership could be an option for you.

Are there Shared Ownership mortgages for disabled people?

If your income consists solely of benefits, it may be difficult to get a mortgage as must pass strict mortgage affordability criteria when you apply.

However, this doesn’t mean that it is impossible. For example, there are mortgage products such as HOLD (Home Ownership for People with Long-term Disabilities) which offers an alternative route into shared ownership. Speak to a Shared Ownership expert here for more information on this.

Can you get a Shared Ownership mortgage if you’re over 50?

This may be possible subject to affordability and credit checks. There are specialist Shared Ownership schemes for people aged over 55. Once the buyer owns 75% of the property, they are exempt from paying rent on the rest.

Can you get a Shared Ownership contractor mortgage?

In the right circumstances, it is possible to get a Shared Ownership mortgage if you are self employed. Lenders will want to look at your books as a proof of your income so ensure that your accounts are up to date and are looked at by a chartered accountant.

If you have 2 to 3 years of accounts then getting a mortgage on a Shared Ownership house can be more straightforward as there is a larger number of lenders that will consider an application.

Can you get a Shared Ownership mortgage on benefits?

When you apply for a mortgage, the lender will want to assess your income and be confident that you are able to pay and continue to your mortgage as well as your percentage of rent.

For someone on a lower income or claiming benefits, you may find that there are fewer lenders to choose from as they may deem your finances as “risky.”

But that’s not to say that it is impossible. Speak to an advisor here to learn more about this.

Can I buy a Shared Ownership property without a mortgage?

Yes, buying a Shared Ownership property without a mortgage is possible as to pay for your share, you can either use cash to buy it outright or borrow the funds via a mortgage.

Why you should speak to a Shared Ownership mortgage broker

Applying for a Shared Ownership mortgage in 2018 can be a daunting experience, especially if you aren’t up to date on the current mortgage rates within the market that may be available to you. A mortgage advisor can search the market for you, saving you time and stress.

As well as this, a good broker will ensure that the mortgage you apply for is affordable and right for you based on your circumstances. We only work with trusted experts that are:

  •  Whole of market
  • Knowledgeable about which lenders to go to as they successfully arrange these already
  • OMA Accredited advisors
  • LIBF Training course certified

Can a mortgage advisor find a Shared Ownership mortgage near me?

The advisors we work with have access to hundreds of lenders all over the UK including:

●     London

●     Manchester

●     Barnstaple

●     Yeovil

●     Taunton

●     Peterborough

●     Portsmouth

●     Preston

●     Crawley

●     Bognor Regis

●     Southampton

●     Yorkshire

●     Edinburgh

●     Glasgow

●     Guilford

●     Sutton

●     Harrogate

●     Hinckley

●     Mansfield

●     Dartford

If you’re looking for a Shared Ownership mortgage in your area, contact a specialist here.

Contact an expert

If you have questions about Shared Ownership mortgages and want to speak to an expert for the right advice call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information.

The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA.

Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.


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