Shared ownership mortgages

A shared ownership mortgage is a home loan for the share of a property that a buyer owns under the shared ownership scheme. The buyer takes a mortgage, or uses savings, for their share and pays rent to a housing association, council or other provider on the share it keeps. Service charges usually apply as well.

Shared ownership homes are leasehold, whether they are houses or flats, and the lease sets out the rent, the service charges, repairs and the rules on buying more shares. Lenders read the lease closely, because its terms affect what the home is worth to them and how much they will lend.

Buyers usually purchase a share of between 25% and 75% of the home's full market value, and a 10% share on some homes (GOV.UK shared ownership guidance, accessed 20 Oct 2026). The deposit is usually 5% to 10% of the share bought, not of the whole home, so less cash is needed.

The monthly cost is the mortgage payment on the share, the rent on the provider's share and any service charge. Lenders add all three together when they assess affordability, so a smaller share does not always mean a lower total cost, and the rent can rise each year under the terms of the lease.

Shared ownership is aimed at buyers who cannot afford the deposit and mortgage payments for a suitable home on the open market. In England, household income limits apply, and buyers usually need to be first-time buyers, former owners who cannot afford to buy now, or existing shared owners moving home.

Providers check eligibility and affordability before offering a home, and many use a financial assessment to set the share a buyer can afford. Rules differ in Scotland, Wales and Northern Ireland, which run their own schemes, so the provider's own criteria are the starting point for any application.

Shared ownership is one of several routes into home ownership for buyers with a small deposit. How it compares with other schemes is set out in the first-time buyer government schemes guide, which covers the current options across the UK.

Staircasing means buying further shares in a shared ownership home, which reduces the rent paid to the provider. Each purchase is priced at the home's market value at the time, based on a fresh valuation, so the cost of a share rises or falls with the property market. Many leases allow staircasing up to full ownership.

Each staircasing step usually needs more borrowing, either from the existing lender or through a remortgage. Valuation and legal fees apply each time, so buying larger shares less often can cost less in fees than many small steps, and lenders check affordability again before they lend more.

Lenders check the buyer's income, outgoings, credit history and deposit as on any mortgage, then add the rent and service charge to the monthly costs. They also check the lease, the provider and the share being bought. Only some lenders offer shared ownership mortgages, so the choice is narrower than for an outright purchase.

A mortgage on a shared ownership share is usually a regulated mortgage (FCA Handbook MCOB, accessed 20 Oct 2026), with the same affordability checks and protections as other home loans. A broker who arranges shared ownership cases regularly will know which lenders accept a particular provider and lease, and the first-time buyer mortgage brokers page lists firms that do.