Choosing a Shared Ownership property could help you onto the property ladder sooner. And with that big hurdle out of the way, we don’t think your employment or credit circumstances should automatically prevent you from securing a mortgage.
Fortunately, other lenders’ red flags are our green lights. You can choose for your mortgages to last for a range of terms, to help make your monthly payments more affordable. Plus, if you ever decide you want to increase the share of your home that you own, we can look at options to extend your borrowing. Remember, you'll have rental payments as well as monthly mortgage repayments to maintain.
Do you want to quickly understand the potential cost of your mortgage?
We can give you an idea of the monthly costs with just a few details like the property value, your deposit amount and how long you need the loan to last.
Calculate costsShared Ownership, also known as ‘part rent, part buy’, allows first time buyers and those who don’t currently own their own home to buy a percentage of a property and pay subsidised rent on the part they don’t own, usually to a housing association.
Because you’re buying a share of the property, rather than the whole home, the amount of money needed for a deposit is often lower, meaning you’d be able to look at homes you’d normally be priced out of.
With Together you could borrow up to 100% of your share within our maximum LTV. You’d buy a small share of the home now and buy more shares at later stages – known as ‘staircasing’ - usually until you eventually own it outright. This can be in 10% increments.
To be eligible for a shared ownership mortgage, you need to be 18 or over, your household income needs to be less than £80,000 a year to qualify (£90,000 in London), and you’ll need to have a decent credit record.
As with any loan, you’ll have to prove to your lender that you’re able to make the relevant repayments, factoring in your household bills and other outgoings too. Most shared ownership homes are available to anyone, but some are reserved for particular groups - first-time buyers or over-55s, for instance.
There are a couple of options when it comes to paying any stamp duty you’re liable for. Usually, you don’t need to pay any until you’ve bought 80% of your home.
As you will be buying your home at just a fraction of its market value, this will often mean that you will be able to avoid paying stamp duty altogether. In areas where property prices are particularly high, this can mean a significant saving.
You have the option to either pay the Stamp Duty on the full value of the property as if you were buying outright or to pay any stamp duty on the share you’re purchasing.
Both of these options have pros and cons, so it’s best to talk to your solicitor or other legal advisor to work out what’s best for your circumstances.
You have the option to increase your share during your time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%. In this instance, the shared owner will no longer pay any rent, just their mortgage along with any relevant service charges and ground rent.
Some housing associations won’t let you buy 100% of the shares to your home, so it’s worth checking this with your solicitor.
Typically, you’ll need a deposit equal to 5-10% of the home you’re buying. With Together you could borrow up to 100% of your share within our maximum LTV, so you don’t have to save for a deposit.
For example: A mortgage of £135,510 payable over 22 years, initially on a fixed rate for 5 years at 9.55% (and then on a tracker rate for the remaining 17 years at 1.8% above the Together Homeowner Managed Rate (THMR)) would require 60 instalments of £1,243.76 followed by 204 monthly payments of £1,323.16 plus a redemption administration fee of £110.00. Read more information on THMR.
The total amount payable would be £344,660.24 made up of the loan amount (£135,510) plus interest on the loan (£205,566.73), arrangement fee (£1,495) plus interest on this fee (£2088.51) and the redemption administration fee (£110.00).
The overall cost for comparison is 10.7% APRC representative. The actual rate available will depend upon your circumstances. Ask us for a personalised illustration.
