Shared Ownership Mortgages

What is a shared ownership mortgage?

A shared ownership mortgage is a residential mortgage on the share of a home that a buyer purchases from a housing association under the government's Shared Ownership scheme, from 10% under the current model, more commonly 25% to 75%, with the buyer paying a subsidised rent on the share the association still owns and able to buy further shares over time. Eligibility requires a household income of no more than £80,000 (£90,000 in London) and an inability to afford a suitable home on the open market; the mortgage covers only the purchased share, the deposit is calculated on the share, and rent and service charge are assessed as committed outgoings. Shared ownership mortgages are regulated residential lending under the Financial Conduct Authority's MCOB rules (gov.uk Shared Ownership). Our low income mortgages page compares shared ownership with the other routes open on a modest income.

Lenders lend against a shared ownership lease. A long lease (990 years under the current model) with the association as landlord, and rely on the lease's mortgagee protection clause, under which the association covers a lender's shortfall on repossession up to a limit, which is why a specific panel of lenders accepts the product on specific terms. For new-build homes GOV.UK puts the rent limit at 3% a year of the value of the share the landlord owns, with most landlords charging 2.75% (gov.uk paying rent); on homes bought on or after 1 April 2021 a 1% share can be bought each year for the first 15 years, alongside larger tranches, and resales run through the association's nomination period before the open market.

Shared ownership mortgage rates

How the pricing is built: shared ownership products are priced by the lenders that accept the lease, in loan-to-value bands calculated on the share rather than the full value, and commonly sit slightly above equivalent standard products because the panel is smaller and the security is a lease with a landlord in it. Arrangement, valuation and legal fees apply as on any purchase, with the association's own fees alongside. The comparison that matters is total monthly cost, mortgage plus rent plus service charge, across the products available, not the mortgage rate alone.

Buying a share, staircasing or remortgaging a shared ownership home? Get in touch with the share, the full value and the rent and service charge: the total monthly cost is what the affordability assessment and the lender both test.

Shared ownership mortgage criteria

Shared ownership criteria have two layers: the scheme rules, which are the same whichever lender is used, and each lender's own terms on the share. The deposit and the loan-to-value are both worked on the share, not the full value. GOV.UK says the deposit is usually between 5% and 10% of the share (gov.uk Shared Ownership); on the cases we arrange, lenders ask for at least 10% of the share, so the maximum loan-to-value on the share is 90%, with terms of up to 40 years. The lender's criteria, the valuation and affordability decide the actual terms.

Types of shared ownership, and how each is mortgaged

Shared ownership has a standard model and several variants, and the variant changes the lease, the eligibility and sometimes the lender.

New-build shared ownership

The most common form: a housing association sells shares in new homes on a development, often with an affordability assessment that sets the maximum share the buyer can sustain. The mortgage is on the share at the lender's shared ownership loan-to-value, the new-build warranty and developer position apply as on any new home, and the lease is the current 990-year model with 1% staircasing. Our new builds and conversions page covers the new-build layer.

Get in touch with the share offered and the association's affordability outcome for a new-build purchase.

Shared ownership resales

Buying an existing shared owner's share means taking over their lease and share percentage, usually after the association's nomination period during which it markets the home to its own applicants. Older leases may carry different terms, 99- or 125-year terms, 3% rent, larger minimum staircase tranches, which the lender reviews, and a short remaining lease is treated as on any leasehold flat (see mortgage for a leasehold flat). The share bought is the seller's; the buyer can staircase later.

Get in touch with the lease and the share percentage for a resale purchase.

Staircasing. Buying a bigger share

Buying further shares is funded by remortgaging onto a larger loan, or from savings, at a valuation set by the association's valuer; each tranche reduces the rent and, at 100%, ends it, converting the lease to a standard long lease (or, on houses, often to the freehold). Lenders assess the increased mortgage on normal affordability and the association handles the lease variation. For homes bought on or after 1 April 2021, a 1% share can be bought each year for the first 15 years, priced from the original price adjusted by the House Price Index (or a RICS valuation), alongside larger tranches (gov.uk staircasing).

Get in touch to plan a staircase against your affordability and the current valuation.

Remortgaging a shared ownership home

A shared owner whose fixed rate is ending remortgages onto a new product with the share unchanged, through a lender that accepts the lease, with the association's consent to the new charge. Product transfers with the existing lender avoid the consent step; a remortgage that also staircases combines the two processes.

Get in touch with your fixed-rate end date and the share held.

Older Persons Shared Ownership

The over-55 version lets buyers purchase up to 75% of a home designed for older people, with no rent payable once 75% is reached; lenders assess term and age at the end of the mortgage, and the specialist lender panel applies. The scheme suits downsizers who cannot afford outright purchase of a suitable home.

Get in touch for an Older Persons Shared Ownership purchase.

Right to Shared Ownership and rent-to-shared-ownership routes

Tenants of housing associations in qualifying new affordable-rented homes can buy a share of their home under the Right to Shared Ownership, and some associations offer rent-to-buy routes into shared ownership. The mortgage is arranged on the share as for any purchase, with the tenancy history in the association's assessment.

Get in touch if you rent from a housing association and want to buy a share.

Shared ownership in Wales, Scotland and Northern Ireland

Shared Ownership Wales runs on similar terms through Welsh housing associations. Scotland's main shared-equity route is the Low-cost Initiative for First Time Buyers, in which the Scottish Government takes an equity stake with no rent, rather than shared ownership with rent; Northern Ireland's Co-Ownership scheme lets buyers purchase 50% to 90% of a home valued at up to £215,000 (£230,000 for a new build), paying rent of 2.5% a year on Co-Ownership's share under a 99-year lease (Co-Ownership, checked 1 October 2026). Each has its own lender panel; the devolved routes are set out in the first-time buyer mortgage guide.

Get in touch for a shared ownership or shared equity purchase outside England.

Shared ownership with bad credit

Adverse credit narrows the shared ownership panel further, but specialist lenders accept shared ownership leases alongside credit issues at pricing that reflects the position; the association's affordability assessment is separate and unaffected by credit score. The lender's assessment of the credit history, the deposit on the share and the total monthly cost decides the case. See declined mortgages for the recovery sequence. Buying after an individual voluntary arrangement is covered on our IVA mortgages page.

Get in touch with your credit report and the association's affordability outcome.

Shared ownership lenders and how to compare

Shared ownership is a panel product. A specific set of lenders accepts the lease and the mortgagee protection clause, each on its own loan-to-value, deposit and credit terms, and comparison runs on total monthly cost, not the mortgage rate. The lenders that lend on shared ownership range from mainstream banks and building societies with dedicated shared ownership ranges to specialist lenders that accept adverse credit and unusual leases; each sets its own maximum loan-to-value on the share, its own treatment of rent and service charge in affordability, and its own view of older leases. Comparing them means comparing the mortgage payment on the share plus the rent plus the service charge, across the products available for the buyer's credit profile and the association's lease, which is the work a shared ownership mortgage broker does, and why the association will often ask for a mortgage in principle from a lender that accepts shared ownership before it issues an offer.

How a shared ownership mortgage is arranged

1. Eligibility and affordability with the association. Household income, first-time buyer or eligible-mover status, and the association's affordability assessment, which sets the maximum sustainable share and the rent.
2. Mortgage in principle. A decision in principle from a lender that accepts shared ownership, on the share, with rent and service charge in the affordability: the association usually requires it before the offer of a share.
3. Full application and valuation. The lender's application on the share; valuation of the whole property; the lease reviewed for the mortgagee protection clause, rent, staircasing and restrictions; the deposit evidenced.
4. Offer, legal work and completion. The mortgage offer; the solicitor's review of the lease and the association's documentation; completion, with the association's consent to the charge.

How shared ownership works. The arithmetic

Every shared ownership number comes from one split. The share bought and the share rented, and the monthly cost is the sum of what each side charges.

Step 1. The share and the mortgage

An illustrative home valued at £300,000, bought as a 25% share:

Step 2. The monthly cost

Illustrative arithmetic on hypothetical figures; the 10% deposit is illustrative and the 5.2% rate is the illustrative rate used across our guides, not a product rate. Not an offer of finance.

The rent is the larger part of the monthly cost at a 25% share, which is the point buyers most often miss: shared ownership reduces the deposit and the mortgage, not the monthly outlay, in proportion. The association's affordability assessment tests exactly this total against income, and lenders test it again.

Step 3. Staircasing

Buying a further 25% at a later valuation of £330,000 costs £82,500, the share's value then, not at the original price, funded by remortgaging the share mortgage from £67,500 (less capital repaid) to cover it. The rent halves, because the unpurchased share halves, and the mortgage payment rises; whether the total falls depends on the mortgage rate against the rent rate (2.75% in this example). At 100% the rent ends and the lease converts.

Step 4. Stamp duty and costs

Stamp Duty Land Tax on a shared ownership purchase can be paid on the full market value at the outset (a market value election, which covers future staircasing) or in stages on the share and rent, with first-time buyer relief available where the buyer qualifies (gov.uk SDLT): a choice made with the conveyancer at purchase. Legal fees, the association's fees and the valuation on each staircase sit alongside.

Step 5. The lease the lender lends on

The lender's security is the shared ownership lease: its term (990 years under the current model), its mortgagee protection clause, the rent review basis, the staircasing provisions, and restrictions. Subletting is normally prohibited, and alterations need consent. Resales run through the association's nomination period first. A lender's willingness to accept the lease, and on what loan-to-value, is what defines the shared ownership panel.

What decides the case

The full value and the association's assessment are fixed; the buyer controls the share (within what affordability supports), the deposit on it, the lender chosen from the panel, and the staircasing plan. Run the total monthly cost. Mortgage, rent, service charge, before choosing the share, and the shared ownership purchase is sized to be sustained, which is the test both the association and the lender apply.

Related reading: the first-time buyer mortgage guide covers every scheme; mortgage for a leasehold flat covers lease length and extension on older shared ownership leases; 95% mortgages covers the full-value alternative.