Shared ownership mortgages

Buying a home outright is not always affordable straight away, especially when deposit savings and mortgage borrowing both need to stretch far enough.

Shared ownership gives some buyers a different starting point. Instead of buying the whole home at once, you buy an initial share and pay rent on the part you do not own.

The key question is whether the full monthly cost works for you. Your mortgage is only one part of the picture, so rent, service charge, lease terms and future staircasing plans all need to be checked before you apply.

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What to know about shared ownership mortgages

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What is shared ownership?

Shared ownership is a way to buy part of a home and pay rent on the part you do not own.

You usually buy an initial share through a mortgage and deposit. The remaining share is owned by a housing association, local authority or provider, and you pay rent on that part.

This can reduce the amount you need to borrow at the start, but it also means your monthly budget needs to account for more than the mortgage alone.

How shared ownership mortgages work in practice

A shared ownership mortgage is usually based on the share of the property you are buying, not the full market value of the home.

For example, if you bought 40% of a £300,000 property, your mortgage would usually be based on that 40% share, or £120,000. You would then pay rent on the remaining 60%, plus any service charge or leasehold costs linked to the property.

Example shared ownership purchase

This is why shared ownership can reduce the deposit needed upfront. In this example, the 5% deposit is based on the £120,000 share being bought, not the full £300,000 property value.

These examples show how a 5% deposit changes at different property prices. Check your own figures with our loan-to-value calculator →

What could the monthly costs look like?

The example below shows the mortgage repayment only. With shared ownership, you may also pay rent on the remaining share, plus service charges and other leasehold costs.

Monthly repayment

The table above is a simplified example based on buying a 40% share of a £300,000 property, with a £6,000 deposit and a £114,000 mortgage. Actual repayments can vary depending on the mortgage rate, term, lender fees and your circumstances.

The table above is a simplified example for illustration only. Estimate your own figures with our repayment calculator →

Who can apply for shared ownership?

Shared ownership is usually designed for people who cannot afford to buy a suitable home outright.

In England, you may usually be eligible if your household income is £80,000 a year or less, or £90,000 a year or less in London. You must also be unable to afford all of the deposit and mortgage payments for a suitable home.

You will usually also need to be one of the following:

• a first-time buyer
• someone who used to own a home but cannot afford to buy one now
• someone forming a new household
• an existing shared owner who wants to move
• a homeowner who needs to move but cannot afford a suitable new home

Some shared ownership homes may also have local connection rules. For example, you may need to live, work or have a connection to the area where the property is being sold.

How much of the home can you buy?

In England, the initial share is often between 10% and 75% of the home’s full market value, although the share available can depend on the property, provider and scheme rules.

The share you buy will usually depend on the property, your deposit, your income and what the housing provider considers affordable.

You may not always choose the smallest possible share. The provider may assess what share is affordable, with the aim of helping you buy a share that is sustainable for your circumstances.

A larger share usually means a higher mortgage and deposit, but lower rent on the remaining share.

Mortgage payments, rent and service charges

With shared ownership, the mortgage is only one part of the monthly cost.

How staircasing works

Staircasing is the process of buying more shares in your shared ownership home.

For example, if you start by owning 40%, you may be able to buy another 10%, 20% or more later, depending on your lease, the scheme rules and what you can afford.

As your owned share increases, the rent on the remaining share usually reduces. In some cases, you may be able to staircase up to 100% ownership.

The cost of buying more shares is usually based on the property’s value at the time you staircase, not the original purchase price. You may also need to pay valuation fees, legal fees, mortgage fees or administration costs.

Your lease and key information document should explain what share amounts you may be able to buy later.

Selling a shared ownership home

Selling a shared ownership home can work differently from selling a property you own outright.

Your lease and housing provider’s rules may explain how the property can be sold, whether the provider has a nomination period and how the sale price is agreed.

If you have not staircased to 100%, the buyer may need to meet shared ownership eligibility rules. You may also need a valuation, legal support and approval from the housing provider before the sale can progress.

Understanding the resale process early can help you plan ahead if your circumstances change later.

Other buying routes to compare

Shared ownership can help reduce the upfront deposit and mortgage amount, but it is not the only way to make buying more achievable.

If you are still comparing routes, these options may also be worth exploring.

Benefits and trade-offs to check

Shared ownership can make buying feel more achievable by reducing the upfront deposit and mortgage amount. It also comes with rent, service charges and lease terms, so the full monthly cost matters.

Is shared ownership right for you?

Before you apply

Before applying for a shared ownership mortgage, it helps to build a clear picture of the costs and scheme details.

It also helps to check which lenders support shared ownership and how they assess affordability for your circumstances.

How Muttuo Mortgages can help

Shared ownership can reduce the upfront deposit needed, but the mortgage, rent and service charges still need to work together.

Muttuo Mortgages can help you:

Whether you are buying your first home or comparing different routes, getting advice early can help you see which options are realistic before you apply.

Shared ownership mortgage FAQs

These FAQs answer common questions about shared ownership, including deposits, rent, staircasing, eligibility, selling later and how shared ownership compares with other buying routes.

What is shared ownership?

Shared ownership lets you buy part of a home and pay rent on the rest.

You buy a share of the property, usually with a mortgage and deposit, then pay rent on the remaining share to a landlord or housing provider.

How does a shared ownership mortgage work?

A shared ownership mortgage is usually used to buy the share of the property you are purchasing.

For example, if you buy a 40% share, your mortgage is normally based on that 40% share rather than the full property value. You then pay rent on the share you do not own.

How much of a shared ownership home can I buy?

In England, the initial share is often between 10% and 75%, depending on the property and scheme.

The share you buy depends on the property, your income, deposit, affordability and the housing provider’s rules.

Do I need a deposit for shared ownership?

Yes, but it is usually based on the share you buy.

If you buy a 40% share, your deposit is usually calculated against that share rather than the full property value. This can reduce the upfront deposit needed.

Do you pay rent with shared ownership?

Yes, you usually pay rent on the share of the property you do not own.

You may also need to pay service charges, estate charges, buildings insurance or management fees, depending on the property and lease.

Can I buy more of the property later?

Yes, this is called staircasing.

Staircasing lets you buy more shares in the property over time. As your owned share increases, the rent on the remaining share usually reduces.

Is shared ownership only for first-time buyers?

No, not always.

Shared ownership is often used by first-time buyers, but other buyers may also be eligible. This can include people who used to own a home but cannot afford to buy one now, existing shared owners who want to move, or people forming a new household.

Are shared ownership homes leasehold?

Yes, shared ownership homes are normally leasehold.

This means your lease sets out the rules, costs and responsibilities that apply. It is important to check the lease length, service charges, rent review terms, staircasing rules and resale process before buying.

Can I sell a shared ownership home?

Yes, but the process can work differently from selling a home you own outright.

If you do not own 100%, you may need to tell the housing provider first. They may have a period of time to find a buyer for your share, depending on the lease.

Is shared ownership cheaper than buying outright?

It can reduce upfront costs, but the full monthly cost still matters.

Shared ownership can reduce the deposit and mortgage needed at the start. However, you still need to budget for rent, service charges, legal costs and future staircasing or selling costs.

Is shared ownership better than a 5% deposit mortgage?

It depends on your deposit, income, property choice and monthly budget.

Shared ownership may reduce the deposit and mortgage needed upfront, but includes rent and service charges. A 5% deposit mortgage may let you buy the whole property, but the mortgage amount and monthly repayments may be higher.