From shared
to yours
With a part interest-only mortgage, you could escape Shared Ownership and own your home outright. 100% ownership. 100% yours.
See for yourself
Is shared ownership still working for you?
You bought to get onto the ladder, but the longer you stay, the more house appreciation upsides go to the provider through rent payments.
With interest-only and part-and-part interest-only you participate fully in house price appreciation, and it’s not as expensive as a full capital-repayment mortgage.
Shared ownership vs Interest only
Current equity: £60,000
Percentage share of property minus mortgage balance
Model into the future
Fine-tune interest-only portion
Assuming an annual house price growth of 2.5% and rent inflation 3.3% (to coincide with CPI).
Stay on Shared Ownership
LTV on share purchased: 60%
Shared ownership mortgage rate: 6.00%
Monthly payment today
i£1,008
Monthly payment in 5 years
i£1,090
Total cost: £62,371
Equity in 5 years
£85,962
Move to a Gen H interest-only mortgage
Current LTV: 80%
80% LTV rate: 5.34%
Monthly payment today
i£1,203
Monthly payment in 5 years
i£1,203
Total cost: £72,201
Equity in 5 years
£108,707
Better off with an interest only mortgage
+£22,745
By staying on shared ownership your monthly payment may be lower but you could be sacrificing significant equity growth to your provider.
Why
interest-only?
Interest-
only
Shared ownership
Participating in 100% property value growth
You own the property outright
Only participate in your share
Fixed monthly payments
Stays fixed for initial period
Rent typically increases along with CPI
Monthly payments cheaper than a typical cap-rep mortgage
Emily
Owns a £300k Shared Ownership house
35, nurse, £50k income
Now has 10% equity
£2,051 C&I payment unaffordable
40% on IO, £1,868 affordable
She now owns
100% of her home
She now participates 100% in house price growth
Pays off more of the capital than she did on Shared Ownership
With £200k equity at the end to downsize