What is a Shared Ownership mortgage?
When buying a Shared Ownership home, you will buy an initial share (usually 25%) of the value of the home and pay a subsidised rent on the remaining amount to a housing provider like Peabody. You can buy more shares in the future which is a process known as 'Staircasing'.
With the share you purchase, you will need to obtain a mortgage which will require a deposit (usually 10% of the share value) and have monthly mortgage payments for the length of the mortgage term.
By buying through Shared Ownership, you will usually need a much smaller deposit than buying on the open market, making it a more affordable way of getting onto the property ladder.
There are two main types of Shared Ownership mortgages;
Fixed-rate mortgage –The most common type of mortgage, the interest you pay stays the same at an agreed fixed-rate period usually from 2 - 10 years. The benefit of this type of mortgage is that you will know exactly how much mortgage payments will be for the duration of the fixed-rate period.
Variable rate – The interest rate that you pay is decided by the mortgage lender and can go up or down depending on whether the Bank of England base rate (tracker) or the lender’s standard variable rate (SVR) changes.
Which lenders offer Shared Ownership mortgages?
Shared Ownership as an affordable housing product has grown in popularity over a number of years meaning that most big high-street banks and lenders now offer mortgages for Shared Ownership homes as well as smaller specialist providers.
An Independent Mortgage Advisor (IMA) will be able to advise you on which lenders are best suited to your personal financial needs and help find the best deals available. They will also be able to complete a financial assessment to see which homes are affordable for you.
Take a look at some of the providers who offer Shared Ownership mortgages to first-time buyers;
Check your Shared Ownership affordability
Want help understanding your personal finances and whether you can afford to buy a home through Shared Ownership?
To help, we have created a Shared Ownership Affordability Calculator to help you quickly assess what you can afford before diving into the home-purchasing journey. Our calculator is designed to give you a clear picture of what you can realistically afford in today's housing market.
Shared Ownership Affordability Calculator
*The Shared Ownership affordability calculator should be used for guidance only and you should speak to an Independent Mortgage Advisor for more details about costs of buying with Shared Ownership.
How does a Shared Ownership mortgage work?
A Shared Ownership mortgage is needed to cover the cost of buying the initial share you purchase as well as any additional shares bought as a result of Staircasing.
The mortgage can cover anything from the initial share you purchase (usually 25%) up to how much you can afford to buy (max 75% on first purchase). You will then also need a deposit of usually 10% of the value of the share.
For example, if you want to buy a 25% share of a £388,000 property under Shared Ownership:
Share of the property bought (25%) £97,000
Deposit required (10% of the value of your share) £9,700
Value of share not owned £291,000 £225,000
Total expected monthly costs £1,384
- Monthly mortgage £465
- Monthly rent £666
- Monthly service charge £253
*Based upon a 10% deposit with an annual household income of £54,530.
Figures are of an indicative Shared Ownership property only and you should speak to an Independent Mortgage Advisor (IFA) to understand your personal affordability for a Shared Ownership home.
Frequently asked questions about Shared Ownership mortgages
To be eligible for a Shared Ownership mortgage, you need to make sure you pass all the eligibility criteria . This can be summarised as:
- Be at least 18 years old
- Have a household income below £90,000 in London (£80,000 outside of London)
- Not own property at the time of purchase
- Not be able to afford a home on the open market
- Not be in rent or mortgage arrears, and demonstrate good credit score
Currently in 2025, average 5-year fixed-rate Shared Ownership mortgages are between 3.9% and 4.3% . The average standard variable rate is around 7–8%. This will vary depending on the lender and will fluctuate based on factors like the Bank of England’s base rate.
Yes, you can remortgage a Shared Ownership home. It’s no different from remortgaging with a standard mortgage. You will need to get the property re-valued and apply for a new mortgage from a provider that offers Shared Ownership mortgages.
We recommend talking to a mortgage advisor who can help you find the best mortgage for your individual circumstances, including the most suitable shared ownership mortgage deals currently available. Advisors may charge a flat fee—usually around £500—or earn commission from Shared Ownership mortgage lenders. You may also need to budget for mortgage valuation and mortgage arrangement fees, typically between £400 and £800.
There is no minimum income required to qualify for a shared ownership mortgage, though lenders will assess your finances to make sure you can afford it. You will need to be able to afford not just the mortgage repayments but the rent on the share you don’t own and the monthly service charge. You can look at our affordability calculator for more help.
There is a maximum income level to apply for Shared Ownership, £90,000 in London, and £80,000 in the rest of the country.
Homeowner Stories
Discover a collection of homeowner stories from previous Peabody New Homes purchasers and find out how we were able to help them onto the property ladder and find their dream home through Shared Ownership.
"We looked at 11 homes in total and they just didn’t feel right for a number of reasons. Once we saw what Peabody New Homes had created here at Southmere, there was no doubt whatsoever."
"Zone at Oval Village is an incredible development in the perfect location. I love the fact I can see the whole city skyline, lit up at night, the view is stunning."
"Shared Ownership isn’t something that exists in Italy. I was able to buy a 50% share and find somewhere to call my own."