Understanding Shared Ownership Mortgages: A Path to Your New Home

Discover how shared ownership mortgages work in the UK, the costs involved, and whether this government-backed scheme could help you get on the property ladder sooner.

If you are looking for a way to get on the property ladder but are struggling to save a large enough deposit for an open-market home, a Shared Ownership mortgage could be the solution. In short, Shared Ownership is a government-backed scheme that allows you to buy a share of a property (usually between 10% and 75%) and pay rent on the remaining share, which is typically owned by a housing association. Because you are only buying a percentage of the property, the mortgage and deposit required are significantly lower than buying outright. You can learn more about how we can help on our Shared Ownership service page or use our mortgage calculator to get an idea of your potential monthly payments.

Under the Shared Ownership scheme, you purchase a share of a property and pay a subsidised rent on the portion you do not own. This scheme is particularly popular with first-time buyers, though it is not exclusively for them.

Here is a breakdown of how the purchase usually works: Your Share: You secure a mortgage to pay for your share of the property's purchase price. Alternatively, you can pay for this share with savings. Your Deposit: Your deposit is usually between 5% and 10% of the share you are buying, not the full value of the property. This makes it much more achievable for many buyers. The Rent: You pay rent to the housing provider on the share they own. Because this rent is often subsidised, it is generally lower than private market rent. Service Charges: Because Shared Ownership properties are usually leasehold, you will typically need to pay a monthly service charge for the maintenance of communal areas.