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How does Shared Ownership work?
Shared Ownership is a scheme that allows you to buy a share of a property (typically between 25% and 75%), with the remainder being owned by a housing association or similar organisation. You then pay rent to the Housing Association or similar organisation, along with the payments on any mortgage you have taken out to buy your share of the property.
What types of mortgage does Teachers Building Society offer for shared ownership purchases?
Applicants for a shared ownership with mortgage with Teachers Building Society can choose from our standard range of Fixed Rate mortgages. You can check our current range here:
FAQs
Shared ownership allows you to get a step on the property ladder with a lower deposit, because you only need to save a minimum 5% of the share you’re buying, not 5% of the overall property price. It also provides the opportunity to gradually increase your ownership share over time.
Staircasing is the process by which a shared ownership homeowner gradually buys more shares in their property over time, increasing their ownership percentage and reducing the amount of rent they pay on the remaining share. Typically you can buy shares of 10% or more at a given time, however this can vary.
Shared ownership is designed for people whose affordability means they can't raise a mortgage for 95% of the property price, but would like to step onto the property ladder. It’s open to people with a household income of less than £80,000 a year (or £90,000 a year in London). This scheme is available for both new build or pre-owned properties, but Teachers Building Society only offers mortgages for the purchase of new build shared ownership homes.
At the current time, we’re only welcoming applications for shared ownership purchase of new build properties on our range of fixed rate mortgages.
We welcome applications for shared ownership mortgages from borrowers who would like to buy a new build property.
Yes, you’ll still need a deposit. For teachers and education professionals we can lend up 95% of the share of the property you’re purchasing, meaning you’ll need a deposit equal to 5% of greater of the share of the property you’d like to buy. For example, if the total property costs £300,000 and you’re buying a 60% share, you’d need a deposit worth 5% of the 60% (a 60% share is £180,000, 5% of £180,000 is £9,000).
The first step is to try our first-time buyer mortgage calculator
Once you have a 5% deposit saved you can arrange a short introductory call with a mortgage advisor who’ll confirm how much we might be able to lend and answer any other questions you may have:
If you already have a shared ownership mortgage with another lender, and are looking to move from owning a share of the property to owning 100% we would be happy to consider a remortgage application from you.
Yes, you can arrange a call from one of our friendly mortgage advisors to talk through your circumstances and find out more.
Important note: It’s important to remember when budgeting for your Shared Ownership property that you will need to budget for both the monthly mortgage payments ON THE SHARE YOU'RE PURCHASING and the rent ON THE SHARE YOU AREN'T BUYING.
Typically, the rental payment is around 2.75% of the share not being purchased. As an example, full market price £300,000 – buying a 60% share (40% staying with the housing association), the rental payment on the £120,000 will be around £275 per month.
To calculate using your own info why not try out Homes England’s Shared Ownership initial eligibility and affordability calculator:
For more information on Shared Ownership you can visit: www.gov.uk/shared-ownership-scheme
Please note: Mortgages are secured on your home. You could lose your home if you do not keep up payments on your mortgage. Terms and conditions apply. Mortgages are subject to underwriting and criteria. Please contact us for full details.