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A Guide to Shared Ownership Mortgages

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: June 23, 2022

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

What is a Shared Ownership mortgage?

A Shared Ownership mortgage is a cross between buying and renting, usually aimed at first-time buyers. A borrower uses a Shared Ownership scheme to buy a percentage of a property they’re planning to live in. You own some of the property and rent the rest.

Not all lenders offer mortgages to customers who are applying through the government scheme, but using a whole-of-market Shared Ownership broker, like the ones we work with, can help you find the most favourable deal. You can use one of these products to buy a share of a property and pay rent on the remaining percentage. You can increase the share you own over time via a process called ‘staircasing’.

What percentage of the property can I buy?

If you are eligible, you can purchase a percentage of the property, usually between 25-75%, and then pay rent on the portion you don’t own, usually to a local council or housing association. By purchasing a percentage of the home, you’ll only need a smaller mortgage.

This is often why Shared Ownership mortgages appeal to first-time homeowners – the normal deposit of around 10% (give or take) is only required for the share being purchased, as opposed to the overall value of the property. It is, therefore, a way for those with little deposit to get on the property ladder.

How does the scheme 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 owns the remainder of the shares you have not purchased.

Do you make mortgage AND rent payments?

Yes. As well as paying your mortgage for the percentage of the property you own, you’re also required to pay rent on the percentage of the property you don’t own. The rent 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, 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 Landlords share as GBP Yearly Rent Monthly rent in GBP
25% £50,000 £150,000 £4,500 £375
50% £100,000 £100,000 £3,000 £250
75% £150,000 £50,000 £1,500 £125

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

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How to get a Shared Ownership mortgage

Only specific properties are available through Shared Ownership, and you will find them listed on Share to Buy (updated regularly by housing associations), as well as services such as Rightmove and Zoopla.

The housing associations who operate these properties will usually handle the Shared Ownership part for you and they might ask you for the following…

  • 3 months wage slips or your most recent P60
  • Proof of savings you may have
  • Photo ID
  • Proof of address (recent utility bill etc)

After this point, you will need to obtain a mortgage for the share of the property you’re buying. The whole-of-market brokers we work with will then calculate how much mortgage each lender may give you and under what conditions.

A mortgage advisor can give you advice, guide you through the entire process from start to finish and find you the best deals for your needs and circumstances. To get started make an enquiry with us today or see our guide to Shared Ownership mortgage applications.

Eligibility criteria

The eligibility criteria for a Shared Ownership mortgage is as follows:

  • You are a first-time homeowner, 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 much can you borrow?

The criteria for a Shared Ownership mortgage is fairly flexible in terms of lending high loan to value (LTV) ratios 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 and requirements 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 4-4.5x income, although some lenders may consider loaning 5x , and in the right circumstances, few may offer 6x.

Income Multiples Loan Amount
x4 £100,000
x5 £125,000
x6 £150,000

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 by making an enquiry with us.

Deposit requirements

To secure a shared ownership mortgage, you’ll typically need a 5% deposit or even 10% of the property’s value, though all mortgage lenders will have different criteria. Your deposit amount also depends on your personal circumstances – for example, having bad credit can influence how much deposit a mortgage lender requires you to put down to offset any risk.

5% deposit

One of the benefits of Shared Ownership mortgages is that many lenders will only ask for a minimum deposit of 5%. Read more on this in our guide to 95% LTV Shared Ownership mortgages.

No deposit

A few Shared Ownership lenders will lend 100% of the funds you need if the circumstances are right. This would include affordability and your credit history. But bear in mind that the higher the deposit, the lower the loan to value (LTV) ratio and the lower the rent will be.

How is the deposit calculated?

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 customer 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.

The below examples are based on a 5% deposit. (Subject to affordability calculations and credit checks the size of the required deposit may increase or decrease.)

Property Price of £200,000

Share Percentage Share as GBP Deposit Amount Mortgage Amount
25% £50,000 5% (£2,500) £47,500
50% £100,000 5% (£5,000) £95,000
75% £150,000 5% (£7,500) £142,500

Low deposits are often required for a Shared Ownership mortgage, the good news is that in some cases, a larger deposit can improve the likelihood of being accepted. This is because it would mean that the customer would own more equity and therefore require a smaller mortgage.

Some lenders also see a larger deposit as proof to the financial commitment to the mortgage. However, this varies from lender to lender and is not always the case.

Most lenders assess each applicant based on their own criteria, which could include:

  • Deposit size
  • Deposit source
  • Income
  • Credit history
  • Income source
  • Property type
  • Equity

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

If you are buying your home through a private 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 property’s value.

To give you an example of 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
25% £50,000 £2,500 £47,500
30% £60,000 £3,000 £55,000
35% £70,000 £3,500 £66,500
40% £80,000 £4,000 £76,000
45% £90,000 £4,500 £85,500
50% £100,000 £5,000 £95,000

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. This process is called “staircasing”. In most cases, you can staircase 100% of the property’s value and become the outright owner.

This would mean you would no longer have to pay any rent. As a word of caution, a lot of housing associations will cap the share of the property you can own, thus preventing you from ever owning it outright. If your plan is to slowly staircase until you own the property fully, it’s essential that you find out if the housing association will allow this before making the purchase.

How to buy more shares

You can increase your shares in your Shared Ownership property by doing the following…

  • 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)

Advantages and disadvantages

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 applicant is purchasing less equity
  • The applicant 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

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 help you based on your own specific circumstances.

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Getting a Shared Ownership mortgage with bad credit

There are things you can do to offset the risk posed by your bad credit. For instance, saving up extra deposit will improve the overall strength of your application and waiting until the credit issue has been on your file for a specific amount of time could be the difference between approval and rejection.

Bad credit mortgage providers base their lending decision on the age, type and cause of the credit issue in question, and exactly how long you should wait to apply will depend on its severity. In this sense, applying for a Shared Ownership mortgage with bad credit on your file isn’t really any different to applying for a standard residential mortgage under the same circumstances.

Some lenders might turn you away or offer unfavourable rates, while others will be more flexible, depending on the exact nature of your situation. Moreover, there are ways you can optimise your credit file ahead of a mortgage.

Our guide to building and repairing your credit for a mortgage has more information on this. If you’re applying for a Shared Ownership mortgage with bad credit, speaking to a mortgage broker who arranges these deals every day will give you the best possible chance of landing the most favourable rates available to a borrower with your exact profile.

Make an enquiry and we’ll introduce you to one today.

Remortgaging a Shared Ownership property

In the right circumstances, you can remortgage a Shared Ownership property. You’ll need to go through a similar process as a standard remortgage but the big difference is that you’ll be limited to mortgage providers that offer Shared Ownership mortgages.

If you are in a position to buy the rest of the shares in your property, then you might be eligible for a standard remortgage product. This could open up the market to you and give you access to better rates of interest.

Switching to a standard residential mortgage

Switching from a Shared Ownership mortgage to a standard remortgaging product isn’t always simple but if you have an experienced mortgage advisor to take you through the process, then it can be made a lot easier and could save you time and money. Get in touch and one of the Shared Ownership mortgage brokers we work with will help you.

Debt consolidation remortgages

Yes! Many of our customers are unaware that there are mortgage providers who specialise in customers with debt or bad credit. Of course, with there being a limited amount of lenders that offer Shared Ownership mortgages, it can be difficult to find one that offers mortgages for borrowers with “bad credit” or debt issues who wish to consolidate them on top of this.

However, it isn’t impossible. In fact, the brokers we work with have helped over 120,000 people find a mortgage, usually with circumstances that other brokers would decline because of their lack of experience or knowledge.

Make an enquiry and we’ll introduce you to a bad credit mortgage specialist who can help you find a debt consolidation remortgage deal.

How to get the best deal

Remortgaging your property can potentially save you time and money, so if you’re interested in switching your Shared Ownership mortgage, you’ll want to find the best rates available. Without in-depth knowledge about the current market, rates and which lenders offer Shared Ownership mortgages, this can be overwhelming and time-consuming.

Compare the market

Going to a Shared Ownership mortgage advisor who can do this for you is so beneficial. Not only can the advisors we work with find you the best rates on the market, they can also compare Shared Ownership mortgages and calculate which one is best for you based on what you want and your affordability. To find the best Shared Ownership remortgage rate, make an enquiry with us.

Shared Ownership remortgage calculator

There are many online Shared Ownership mortgage calculators that provide an “estimation” on how much you can expect to pay on your new mortgage but the problem with some of these is that they don’t take personal factors into consideration.

Use our Shared Ownership calculator through the link to get a rough estimate of the mortgage you’d qualify for, or make an enquiry for a bespoke calculation from an expert.

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Get matched with a Shared Ownership broker today

Ready to apply for a mortgage through Shared Ownership? Make an enquiry and we’ll introduce you to a mortgage broker with specialist knowledge of the scheme for free.

We offer a free broker-matching service that will take your needs and circumstances into account to pair you with an advisor who specialises in Shared Ownership. This will be somebody we’ve handpicked based on their knowledge of the scheme and strong track record helping customers just like you get the mortgage they need.

Your advisor will guide you through the application process and potentially help you save time and money by introducing you to the right lender, first time. Speaking to one of the experts we work with won’t affect your credit rating and there’s absolutely no obligation.


Can you get a Shared Ownership buy-to-let mortgage?

No. Shared Ownership is only available to borrowers who 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, which are available for first-time landlords and often require larger deposits of around 25-30%.

Do you need a guarantor?

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, many 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 in your sole name as well as the rental payments and any other outgoings you have, then Shared Ownership could be an option for you as a solo applicant.

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 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 for more information.

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 over 55’s. Once the customer 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 proof of your income to 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 while 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 afford 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. To pay for your share, you can either use cash to buy it outright or borrow the funds via a mortgage.

Can you get interest-only Shared Ownership mortgages?

Shared Ownership mortgages are usually repayment only. Interest only is difficult to come by when purchasing through the scheme, and the few lenders which might consider it will insist that you have a high deposit and a viable repayment plan. That said, housing associations are generally against entering agreements with borrowers who are planning to take out a Shared Ownership mortgage on interest only.

Can I get a Shared Ownership tracker mortgage?

Yes, they come in both ‘fixed rate’ and ‘tracker’ varieties, just like standard residential mortgages. With a fixed rate , the amount of interest you pay will be locked in for a set amount of years before the lender’s standard variable rate kicks in. A tracker rate, meanwhile, follows an external interest rate – usually the Bank of England’s base rate.

Can I get a joint Shared Ownership mortgage?

Yes, the lease can be in sole or in joint names. If one of the people named on the mortgage passes away, the lease will transfer over to the other joint owner.

Can I get a Shared Ownership mortgage with a friend?

Yes, as long as you and your friend pass the lender’s eligibility checks and have a combined household income of under £90,000 in London and £80,000 outside of the capital.

Can you get a Shared Ownership mortgage on any house?

No, usually only on specific new build homes and existing properties through resale programmes from local housing associations.

Can I buy a Shared Ownership property with cash?

Yes. Some people choose to buy their stake in a Shared Ownership property outright using a cash lump sum. You might go down this route if, for example, you don’t qualify for a mortgage because of your age, credit history or another reason.

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

The advisors we work with have access to hundreds of lenders and can help customers all over the UK including those based in (or buying properties in):

  • London
  • Manchester
  • Barnstaple
  • Yeovil
  • Taunton
  • Peterborough
  • Portsmouth
  • Preston
  • Crawley
  • Bognor Regis
  • Southampton
  • Yorkshire
  • Edinburgh
  • Glasgow
  • Guilford
  • Sutton
  • Harrogate
  • Hinckley
  • Mansfield
  • Dartford
  • Many other locations across the UK

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the 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 information 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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