Shared Equity Mortgages: Guide to Shared Homeownership in the UK

Shared Equity Mortgages: Guide to Shared Homeownership in the UK

We are often asked about shared equity mortgages; this is different from “shared ownership.” Shared equity (this term can be confusing; however, the property is just yours), effectively this is a way to borrow money to use as a deposit to buy a property.

This simply put, would mean that you would take out two loans simultaneously, first the equity loan, second the actual mortgage. Shared equity loans are typically for first-time buyers and for newly built homes.

There are options on how and when you can pay back the equity loan. One option is regular monthly payments.

The second is waiting until you sell the property and pay back the loan in full. A key thing to remember with an equity loan is that it is tied to the actual equity, and the loan is worth a percentage amount of the property value at purchase.

For example, if you take out an equity loan worth 10%, for a property valued at £100,000, you would be taking out an equity loan of £10,000. If you decided to wait to pay off your equity loan when you sell your property; if the value of your property is £300,000, then 10% equity of the value amount would be £30,000.

There are different shared equity schemes available to buy new build homes, below are some of the most common.


The government offers shared equity (Help to Buy) loans for first-time buyers to buy newly built homes from registered homebuilders. The shared equity scheme is only available for properties that are within maximum value thresholds, set according to region.

It is also worth mentioning that on the “Help to Buy” government scheme, there would also be an interest fee payable, but not for the first 5 years, followed by an interest rate of 1.75%, which is also subject to increase annually in line with the consumer price index.

Property Developers

On the other hand, some property developers also offer their own shared equity schemes as an incentive to new buyers.

Would you like to discuss your mortgage options?

As an independent mortgage broker, we have access to comprehensive mortgage and insurance markets, giving competitive options and prices across both residential and commercial products. Get in touch to see how we can assist.

Attention: Late repayments can cause you serious money problems. For help go to

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