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Shared ownership mortgage calculator

How lenders use shared ownership mortgage calculators to establish how much you can borrow.

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By Pete Mugleston   Mortgage Advisor

Last updated: 18th April 2019 *

 How do shared ownership mortgage calculators work?

We receive lots of enquiries from people who would like to understand how a shared ownership mortgage calculator works, what information is required and how a lender would use this type of mortgage calculator to establish how much someone can borrow through a shared ownership scheme.

To answer these questions we’ve put together this guide to shared ownership mortgage calculators where we will cover:

Once you’ve read through the details below, if you’d like to understand more about how shared ownership mortgages are calculated make an enquiry and we can arrange for an expert to contact you directly.

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What is a shared ownership mortgage calculator?

A shared ownership mortgages calculator is a tool a lender would use in order to establish how much they would be prepared to lend a prospective borrower for this type of mortgage.

Whilst all lenders will use their own calculator based on their specific in-house requirements, the good news is that such tools are not exclusive to mortgage providers.

You can find free shared ownership mortgage calculators on many lenders’ or other online mortgage websites.

How are shared ownership mortgages calculated?

A lender will use a mortgage calculator for shared ownership to work out how much your repayments will be on the amount you are looking to borrow and also to calculate what the rental payments will be on the remaining amount.

The information they input will typically be -

  • Total purchase price of the property
  • The amount you are looking to borrow
  • Your deposit
  • The term of the mortgage
  • Your income
  • Your committed expenditure

A lender will be able to calculate the repayments using their internal interest rates they would look to charge for these types of mortgage and factor in any associated fees and charges that may also apply.

You should note that some lenders use more sophisticated calculators than others. For instance, one lender might only input the data mentioned above, while others will factor in data from your credit file. This being the case, the amount of mortgage you’re offered can differ from one provider to the next, sometimes significantly.

This is why it’s important to speak with a whole-of-market broker before proceeding. The advisors we work with can introduce you to the lender whose shared ownership mortgage calculator is most likely to return favourable results for you.

What types of shared ownership mortgage calculators are there?

There are a number of different types of shared ownership mortgage calculators that will be able to calculate different information, such as:

Shared ownership mortgage affordability calculator

All mortgage providers use their own criteria and specific shared ownership calculator to work out how much they feel you can afford to borrow.

In a general sense, the affordability guidelines used for shared ownership calculators will not differ dramatically from those of a conventional mortgage. A lender will use your gross household earnings and apply an income multiple to work out the maximum possible mortgage they feel you could afford.

For this type of lending most providers would use 4 x your salary, however, some will consider 4.5 x your salary.

On this basis, the table below gives you an example of the maximum amounts you may be able to borrow for a shared ownership mortgage:

Household Earnings 4x Income 4.5x Income
£20,000 £80,000 £90,000
£30,000 £120,000 £135,000
£40,000 £160,000 £180,000
£50,000 £200,000 £225,000
£60,000 £240,000 £270,000
£70,000 £280,000 £315,000
£80,000 £320,000 £360,000
£90,000 £360,000 £405,000

Although most mortgage providers will cap their lending at 4-4.5 times your income, with the help of the whole-of-market brokers we work with, it may be possible to find a specialist lender who would be willing to stretch to x5 or x6, as long as you tick all (or at least most) of the other boxes on their eligibility checklist.

Keep in mind: The above table only provides a rough idea of the amount you could potentially borrow, but it’s also important to factor in how much you will be paying in rent on the share of the property you do not own. Read on for more information...

Shared ownership mortgage and rent calculator

With a shared ownership mortgage you have the opportunity to buy a share of your home (usually between 25% and 75%) with the remaining percentage owned by either a house builder, private investor or a housing association. In addition to a mortgage for your share, you would be expected to pay rent on the other share.

A shared ownership mortgage and rent calculator will work out both the repayment for the amount you are looking to borrow and also the amount of rent you would be expected to pay for the remaining amount.

The table below illustrates how this may work out:

Property Purchase Price Share to buy - 50% Remaining Share - 50% 5% Deposit Amount to Borrow Monthly Mortgage Payment (At 4%)** Monthly Rental Payment (At 3%)**
£200,000 £100,000 £100,000 £5,000 £95,000 £501.44** £250.00

(* - based on a 25 year term / **- both rates used are for example purposes only)

Most lenders will require a 5% deposit from you for the amount you want to borrow, however, some will consider lending you the entire amount of your share. For the remaining share, the landlord will collect rent from you.

 Shared ownership mortgage repayment calculator

Typically, shared ownership mortgages are only offered on a repayment basis for the amount you are looking to borrow. A lender will use a mortgage repayment calculator to work out how much your repayments will be for shared ownership and from this they can begin to assess whether you can afford this type of mortgage.

As we’ve already touched on, some UK lenders’ mortgage calculators may be more sophisticated than others and be able to take into account other factors that would influence how much you could afford to borrow for a shared ownership mortgage, such as:

Ground rent

All shared ownership properties are sold on a leasehold basis, therefore, in addition to your mortgage and rent payments you will also have to pay a yearly ground rent premium.

A more advanced mortgage calculator would also be able to take this premium into account when establishing the overall cost to you for a shared ownership scheme.

Disposable income

Some lenders’ calculators will request information about both your gross income and major outgoings in order to establish the amount of disposable income available before working out how much you would be able to afford to repay, in line with their internal affordability assessments for a shared ownership mortgage.

Credit history

A poor credit history can cause problems with how much a provider may be prepared to lend you, depending on the type of issue you’ve had and when it was registered.

A lender using a sophisticated shared ownership mortgage calculator will be able to factor in how much you may be able to borrow if you have had any credit problems in the past. Make an enquiry for more information or consult our bad credit page here.

How can I find a reliable shared ownership mortgage calculator?

You can’t get more reliable than the scheme’s official website. A shared ownership mortgage calculator can be found on the Help to Buy South website here.

They are also available on most lender’s websites and other financial hubs. However, as all lenders use different criteria, the calculators they use will be tailored accordingly.

If you make an enquiry with us we can arrange for a mortgage broker we work with to get in touch. As they adopt a ‘whole of market’ approach, they will be able to identify shared ownership mortgage calculators used by lenders in the UK with the most favourable terms for a borrower with your needs and circumstances.

Why you should speak to a shared ownership mortgage broker

At Online Mortgage Advisor we can offer you a first-class service tailored to your own specific needs with access to the most experienced brokers available that:

  • Have whole of market access
  • Have excellent relationships with Shared Ownership mortgage lenders
  • Are OMA accredited advisors
  • Have completed a 12 module LIBF accredited training course
  • Can offer bespoke advice on Shared Ownership mortgages

Speak to a shared ownership mortgage expert

If you have questions 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.

Updated: 18th April 2019
OnlineMortgageAdvisor 2019 ©

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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