Shared Ownership Mortgages - Clan Financial Services

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What are Shared Ownership Mortgages?

When you buy a shared ownership property you buy a percentage stake in the property. This is normally around 25 to 75 per cent. You then typically pay a subsidised monthly rent to a housing association for the remaining ‘share’ of the property.

You can generally then buy additional portions of the property at a later date (this is called ‘staircasing’).

These schemes are popular with first time buyers as it means you can buy part of a home even if you don’t have a large income or a big deposit.

To buy such a property you can take out a shared ownership mortgage. The interest rates, fees and criteria for these mortgages vary from lender to lender, so it’s important to shop around before signing up for a deal.

The amount of deposit that you need

Even if you’re only buying 50 per cent of the property’s value you may still have to put a 5-10 per cent deposit down, depending on the lender.

The rent you'll need to cover

The rent that you pay to the housing association will generally be classed as a commitment when a shared ownership lender calculates the mortgage amount they are prepared to offer. When looking at income multiples you should take this into account.

Which lenders offer these deals?

Many major lenders offer shared ownership mortgages, but not all.

The interest rates and deals on offer

Make sure you carefully research all the shared ownership mortgage deals on the market to find the right part buy part rent mortgage for you.

Take into account the fees and charges you'll need to pay as well as the rate of interest you'll be charged and remember that you may also have to pay a service charge and/or ground rent if buying a flat.

If you are interested in finding our more about shared ownership mortgages, complete the form below and we'll contact you at a convenient time to discuss your requirements.

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