Shared Ownership Mortgages

You may qualify for a shared ownership mortgage if your annual household income is £80,000 or less (£90,000 or less if you live in London) and you’re unable to afford all of the deposit and mortgage payments for a home that’s suitable for your needs.

You also need meet one of the following criteria:

• You’re a first-time buyer
• You were once a homeowner but can't afford to buy a home now
• You’re creating a new household, such as after a divorce
• You’re already a shared owner and want to move home
• You own your home but want to move and cannot afford a property that’s suitable for your needs

To qualify for certain homes under the shared ownership mortgage scheme you may have to prove your connection to the area where you want to buy the home - for example you already live or work there.

The Government has a shared ownership eligibility checker on its website.

It’s possible to remortgage a shared ownership property in a similar way to a standard remortgage. This means taking out a new mortgage on a property under shared ownership. Shared ownership remortgages aren’t much different from a typical mortgage; however, only a limited number of mortgage lenders offer shared ownership remortgages. Remortgaging allows you to secure a better deal on your loan, which can be particularly useful when the amount of equity in the home has increased, or your income has risen.

You may choose a shared ownership remortgage if you wish to own more shares of the property. Staircasing is a good way of helping you work towards eventually owning the property outright. When you increase your share of your home, you’ll benefit from any increase in the home’s value. You’ll also reduce the rent you’re paying on the share of your home that you don’t own, so if you staircase your way to owning 100% of the property, you won’t have to pay any rent at all. If you choose to sell your home in the future, the more shares you have, the more you will cash in, especially if the property has increased in value. 

Shared ownership remortgages are also a useful way of ensuring you get a better deal on your mortgage. While shared ownership remortgage deals may be limited, it’ll give you the chance to lower your mortgage rate or switch to a new deal before coming to the end of your current discounted period.

You can apply to remortgage your shared ownership property much like you would for a standard remortgage. This will likely include the process of income assessments and a valuation of the property. Swapping to a different mortgage lender may also mean you can borrow more. They’ll reimburse your existing lender in full, and you’ll be left with extra capital to purchase more shares in your property. Make sure you’re aware of your shared ownership agreement terms and that you have informed the housing provider of your plan to remortgage.

The costs associated with shared ownership remortgages tend to be higher than a standard mortgage as only certain lenders will arrange shared ownership mortgages. However, despite this, there are good rates to be found, so speak to one of our mortgage experts who will be able to advise you on the best shared ownership remortgage deals currently available. Staying with your existing mortgage lender may actually be your cheapest option, as moving lenders will likely cost you in fees. Some mortgage lenders may pay these charges to secure your custom, so it’s well worth looking into. 

To find out more about shared ownership mortgage deals that might be right for you, call us today on 0330 433 2927 or enquire online, and one of our advisors will talk you through all your options.