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Government Help

Guide to shared equity

Your Mortgage
Written By:
Your Mortgage
Posted:
Updated:
09/03/2017

Not to be confused with ‘shared ownership’, with a ‘shared equity’ scheme the Government provides the borrower with an ‘equity loan’.

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.