Shared ownership mortgage advice
Buying a share of a home through the shared ownership scheme? Not every lender knows the rules. We compare the lenders that actively support shared ownership, so your mortgage offer matches how the scheme actually works.
What is shared ownership, and how does it work?
Shared ownership is a government-backed affordable homeownership scheme, run through Homes England and local housing associations, that lets you buy a percentage share of a home, usually between 10% and 75%, with a shared ownership mortgage and a deposit, while paying rent to the housing association on the share you don't own. Between the mortgage payment, the rent and the service charge, your total monthly outgoings are often lower than buying the same property outright.
You can increase your share over time through a process called staircasing, buying further percentages as your income and savings allow, in most cases up to full ownership at 100%. Shared ownership properties are available both as new build homes sold by housing associations and developers, and as shared ownership resales from existing owners looking to move on.
How much deposit do you need for a shared ownership mortgage?
Because you're only getting a mortgage on your share of the property rather than its full market value, the deposit needed is proportionally smaller than for a standard purchase. Most mortgage lenders ask for 5% to 10% of the share you're buying, not of the full property value. As an illustration only: on a 25% share of a £280,000 home, a 10% deposit would be around £7,000 rather than £28,000.
The main criterion most lenders apply is affordability: your deposit savings and the monthly payments on the mortgage deal you're offered need to fit comfortably within your income and outgoings, once the rent and service charge are added in, before you buy a home this way.
Who is eligible for the shared ownership scheme?
Shared ownership is aimed at first-time buyers, people who used to own a home but can't afford to buy now, and existing shared owners looking to move. There is a household income cap, currently £80,000 a year outside London and £90,000 within it. You'll usually also need to show you can't afford to buy a suitable home outright on the open market, which the housing association assesses alongside a standard affordability and credit score check. Priority is often given to current social housing tenants, people with a local connection to the area, and members of the armed forces.
The rules described here apply to shared ownership in England. Wales runs its own version, and separate affordable housing schemes cover Scotland and Northern Ireland, so always check which version applies to the property you're looking at.
Which lenders offer shared ownership mortgages?
Not every high-street bank offers a shared ownership mortgage, and the panel changes as lenders adjust their appetite for the scheme. Lenders that have offered shared ownership mortgages include:
Halifax
High-street lender with a shared ownership range.
NatWest
Shared ownership lending through its main range.
Nationwide
Building society with shared ownership criteria.
Leeds Building Society
Long-standing shared ownership lender.
Newcastle Building Society
Regional lender active on the scheme.
Platform
The Co-operative Bank's intermediary lending arm.
Each lender has its own view on minimum share, maximum loan-to-value, and how it treats the rent in affordability. A mortgage broker who works across this panel regularly can tell you which lender is actively competitive on shared ownership this month, rather than which one simply lists a product it rarely approves.
Is it hard to get a mortgage for shared ownership?
Shared ownership mortgages aren't hard to get if you go to the right lender, but not every lender applies the same affordability rules. Some count the full rent as an outgoing when assessing what you can borrow, others treat it more lightly, and that difference alone can change your maximum loan by tens of thousands of pounds. That is where a specialist mortgage broker earns their keep.
Shared ownership mortgage calculator: working out what you can afford
A shared ownership mortgage calculator estimates your likely mortgage amount, deposit and monthly cost by combining three figures: the share percentage you want to buy, the full market value of the property, and the rent charged on the unowned share, which on newer leases is capped at 2.75% of that share's value per year (illustrative only; the exact figure is set in your lease). Run the numbers on a few different share percentages, say 25%, 40% and 50%, before deciding. A smaller share means a smaller mortgage and deposit, but more rent. We'll run this calculation properly against live lender rates on your call, rather than a generic online estimate.
Shared ownership mortgage rates: fixed or variable?
Shared ownership mortgage rates work the same way as any other residential mortgage. A fixed rate holds your monthly payment steady for two, three or five years, while a variable or tracker rate moves with the lender's standard rate or the Bank of England base rate. Because the mortgage sits alongside rent to the housing association, most buyers prefer the predictability of a fixed rate. Rates and fees differ meaningfully across the small panel of shared ownership lenders, which is another reason to compare rather than accept the first agreement in principle you're offered.
Service charges, ground rent and leasehold explained
Every shared ownership property is sold on a leasehold basis, which means that alongside your mortgage payment and rent you'll also pay a service charge covering buildings insurance, maintenance of communal areas and management of the block or estate, plus ground rent on some older leases. Service charges can rise each year and aren't included in most online shared ownership mortgage calculators, so check them carefully before you commit.
How does staircasing work?
Staircasing is the process of buying further shares in your property over time, as your income grows, moving your share from, say, 25% up to 50%, 75%, or in many cases 100%. Each staircasing step needs a new valuation of the property, and you'll typically need to remortgage or take further borrowing to fund the increased share. The price of each new share is based on the property's value at the time you buy it, not the price you originally paid. Once you reach 100% ownership you stop paying rent to the housing association, although leasehold terms can still apply on flats.
How does stamp duty work for shared ownership properties?
You can choose to pay stamp duty either on the market value of the whole property upfront, known as a market value election, or in stages, paying only on the share you buy at first and then again once your share passes 80%. Many first-time buyers choose the market value election because first-time buyer relief can then apply to the full property value, which may mean little or no stamp duty. Which option works out cheaper depends on the property value and how quickly you expect to staircase, so check with your solicitor before completion.
Want to know what you could borrow?
Tell us the property, the share you're looking at and your deposit. We'll check which shared ownership lenders fit your circumstances and how each one treats the rent.
Call 01933 829 444Are shared ownership mortgages worth it?
The main advantage is accessibility: a smaller deposit, a smaller mortgage, and a genuine route onto the property ladder for buyers who can't stretch to buying outright in their area. Monthly outgoings, mortgage plus rent, are also often lower than renting the same property privately.
The disadvantages are worth weighing up honestly. You're a leaseholder as well as a part-owner, so service charges sit on top of your mortgage and rent, and these can rise over time. Selling can take longer, since the housing association usually has a nomination period to find a buyer for your share first. And staircasing later can cost more than you expect if prices in your area have risen.
Shared ownership vs other affordable homeownership schemes
Shared ownership isn't the only affordable route to buying. Rent to Buy lets you rent at a discounted rate while you save a deposit. Discount Market Sale and First Homes instead sell you 100% of the property at a fixed discount below market value, rather than splitting ownership. Shared equity is different again: it's usually a loan that tops up your deposit on a property you own outright.
Shared ownership
- Buy 10% to 75% of the property to start
- Pay rent on the unowned share
- Staircase up to 100% over time
- Leasehold, with a service charge
Discount Market Sale or First Homes
- Buy 100% at a fixed discount
- No rent to a housing association
- Full ownership from day one
- The discount usually passes to the next buyer
How to apply for a shared ownership mortgage
Getting a shared ownership mortgage in place generally follows the same order: register your interest with the housing association and confirm your eligibility; get an agreement in principle from a lender that supports shared ownership; instruct a solicitor experienced in leasehold and shared ownership purchases; then submit your full mortgage application once you've reserved a property, with your broker chasing the housing association's paperwork alongside the lender's. Most housing associations set a deadline for the mortgage offer after reservation, so having the lender lined up early matters.
New build vs resale shared ownership properties
A new build home bought through shared ownership is sold by a housing association or developer, usually off-plan or newly completed, and often comes with a new build warranty. A resale shared ownership property is bought from an existing owner who wants to move on. These can come onto the market at whatever share the current owner holds, often with less waiting than a new build allocation.
Can you get a shared ownership mortgage if you're self-employed?
Yes. Self-employed buyers can get a shared ownership mortgage, though most lenders will want two years of accounts or tax calculations (SA302s) to evidence your income. Because the shared ownership lender panel is already smaller than the wider market, a self-employed applicant benefits even more from a broker who knows which of those lenders is comfortable underwriting self-employed income on this scheme.
Using a shared ownership mortgage broker
Shared ownership mortgages sit slightly outside standard criteria: rent alongside a mortgage, a leasehold share, staircasing clauses, and housing association approval on top of lender approval. A mortgage broker who places these cases regularly tends to get smoother outcomes than going direct to a single lender. We compare lenders who actively support the scheme, check how each one treats your rent, and make sure your mortgage offer allows for your staircasing plans, whether you're buying in Northamptonshire, Bedfordshire or elsewhere in England.
Shared ownership mortgage FAQs
Which banks give mortgages for shared ownership?
A number of high-street and specialist lenders, including Halifax, NatWest, Nationwide and several building societies, have offered shared ownership mortgages. Not all lenders do, and the ones that do apply different affordability rules to the rent. We compare the current panel rather than relying on one lender's product page.
Are shared ownership mortgages worth it?
For buyers who can't afford to buy outright on the open market, shared ownership is often worth it as a route onto the property ladder. The leasehold structure, service charges and staircasing costs mean it isn't automatically cheaper than renting or buying outright in every case.
How much deposit do you need for a shared ownership mortgage?
Typically 5% to 10% of the share you're buying, not of the full property value.
Can I sell my shared ownership home?
Yes. You can sell your share, though the housing association usually has a nomination period, commonly four to eight weeks depending on your lease, to find a buyer before you can market it more widely yourself.
Can I make home improvements to a shared ownership property?
Generally yes, but most housing associations require written permission before structural changes while you own less than 100%.
Do lenders include the rent when working out affordability?
Most lenders factor the rent you'll pay to the housing association into their affordability assessment alongside the mortgage, though exactly how they weigh it varies. That is one of the reasons the right lender choice matters so much on this scheme.
What's the difference between shared equity and shared ownership?
Shared equity usually means an equity loan that reduces the mortgage you need on a property you fully own. Shared ownership means you own a percentage of the property and pay rent on the rest.
How long does a shared ownership mortgage application take?
From agreement in principle to mortgage offer typically takes four to eight weeks, depending on the lender and how quickly the housing association confirms its side of the paperwork.
Talk to a shared ownership mortgage broker
Tell us the property, your share and your deposit, and we'll compare shared ownership mortgages across the lenders that support the scheme to find one that fits.
This page is general information, not a personal recommendation. Figures are illustrative only. Your home may be repossessed if you do not keep up repayments on your mortgage.