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Guide to shared equity

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30/10/2012
Not to be confused with 'shared ownership', with a 'shared equity' scheme the Government provides the borrower with an 'equity loan'.
Guide to shared equity

Schemes such as Help to Buy, Newbuy and The Armed Forces Home Ownership Scheme can be described as shared equity, beacuse in each case the buildre and/or Government provides an ‘equity loan’on the purchase of the property, which the borrower backs up with a conventional mortgage.

In some cases, such as with Help to Buy, the loan is interest-free for the first five years.

Generally speaking, the Government or other provider of the loan will subsequently share in a proportional increase (and sometimes decrease) in the value of the property.

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