What is Shared Ownership?

Shared Ownership is a government-backed scheme designed to help first-time buyers and those who can’t afford to purchase a property outright. It allows you to buy a share of a property (usually between 10% and 75%) and pay rent on the remaining share. This scheme makes homeownership more accessible by reducing the initial deposit and mortgage amount required. As your financial situation improves, you can increase your share through a process called staircasing, eventually owning the property outright if desired.

How to Use the Shared Ownership Calculator

Step 1: Enter Property Details

Begin by inputting the full market value of the property you’re interested in. This is the total price of the home if purchased outright. Next, specify the share percentage you wish to purchase, which typically ranges from 10% to 75%.

Step 2: Provide Deposit Information

Enter the percentage of the share value you plan to put down as a deposit. Most lenders require a minimum of 5%, but a larger deposit can lead to better mortgage terms.

Step 3: Input Mortgage Details

Specify the mortgage term in years (usually between 5 and 40 years) and the interest rate you expect to receive. If unsure, you can use average rates available in the market.

Step 4: Add Financial Information

Enter your annual household income and any existing monthly debt payments. This information helps assess affordability and calculate your debt-to-income ratio.

Step 5: Calculate and Review Results

Click the “Calculate” button to generate your results. The calculator will provide a breakdown of costs, including:

• Share value and deposit required
• Mortgage amount and monthly payments
• Estimated monthly rent and service charge
• Total monthly cost
• Debt-to-income ratio and affordability assessment

Step 6: Analyze the Affordability Assessment

Review the affordability assessment provided. This will indicate whether the shared ownership option is comfortably within your budget, potentially stretching your finances, or possibly beyond your current means.

Remember, while this calculator provides a good estimate, it’s essential to consult with a financial advisor and mortgage specialist for personalized advice before making any decisions. They can provide more accurate figures based on your specific circumstances and guide you through the shared ownership process.