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Financial Services > Mortgages > Shared Equity > Shared equity mortgages

Shared equity mortgages

Shared equity mortgage guide

Thanks to high house prices, many first time buyers and key workers cannot afford to buy on the open market.

Shared equity mortgages are meant to help them get a toehold on the property ladder.

However, the options are limited. The latest government scheme, Firstbuy Direct, is due to start later this year and like its predecessor, HomeBuy Direct, it only aims to help those buying new-build homes.

With Firstbuy, qualifying first-time buyers (those with a joint income of less than £60,000) get a loan of up to 25% - with 10% from the government and 15% from the builder.

The buyer will have to find a 5% deposit. The deposit loans will be interest-free for five years, and then will attract a below-the-market interest rate.

The government has put £250 million aside for the scheme, which it hopes will create building industry jobs.

The previous, more generous HomeBuy Direct ran for about 18 months and helped about 10,000 buyers. Other schemes including Social HomeBuy and Rent to HomeBuy were scrapped when they didn't take off.

Separate from such schemes are shared ownership schemes, which allow you to buy a proportion of a property and buy the rest when you can afford to.

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