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Shared mortgages

Due to the difficulty many first-time buyers are having getting on the property ladder, many people are now looking to buy a home in a shared scheme – either through a shared equity scheme or a shared ownership scheme.

There is a range of different schemes to look at, but FirstBuy is the latest scheme from the government.

FirstBuy is a shared equity scheme where the government and a housebuilder provide a loan to cover 20% of the property's value. This loan is interest-free for five years.*

The buyer then contributes a further deposit of 5%, taking the total equity stake to 25%. This means you can access 75% loan-to-value mortgage deals, which are usually more competitive.

There will be just over 10,000 properties made available for the FirstBuy scheme across England and Wales between September 2011 and March 2012.

Shared equity schemes such as this are usually offered by housebuilders and they provide the extra equity.

However, they are different from shared ownership schemes which are part buy, part rent schemes and are usually offered by housing associations. Under these schemes, the customer buys a share in a property from as little as 25% and will then pay a lower rent on the remaining amount.

There are a number of other schemes to look at - take a look at our schemes section.

*After this point, a fee is charged. This fee is payable to the National HomeBuy Agent and the amount is 1.75% per year on the outstanding loan. The fee will rise on an annual basis by the Retail Price Index (RPI) plus 1%.

Lender Initial Rate Duration Standard Rate Overall Cost For Comparison Max Loan To Value Fee
2.59% 2 years 5.69% 5.4% APR 75% £999
2.69% 2 years 4.99% 4.9% APR 75% £495
2.79% 2 years 4.99% 5% APR 75% £795
2.94% 2 Years 5.69% 5.4% APR 75% £199
2.99% 2 years 4.99% 4.9% APR 85% £495
2.99% 3 years 4.99% 4.6% APR 70% £499
3.0% 2 years 5.69% 5.5% APR 80% £999
3.19% 5 Years 4.79% 4.2% APR 80% £995
3.5% 2 years 5.49% 5.1% APR 75% £595
3.84% 2 years 3.94% 4% APR 90% Nil

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