What is a shared equity mortgage?

Shared equity mortgages provide a route to buying a home without having to cover the entire cost of it. When buying a shared equity home on the open market, or from a housing association, you fund the majority share through a deposit and a mortgage, with the remaining share being provided by the Scottish Government.

For example, if you buy a new home for £100,000 and your deposit and mortgage pays for 80% of the home’s value, the Scottish Government will hold a 20% share. Therefore, you pay £80,000 and the Government pays £20,000. If you later sell your home, 20% of the sale value of the property will be returned to the Scottish Government.

There are no monthly or interest payments to the Scottish Government. You will own the property outright, however, the Scottish Government holds a security over the share it has funded and you can pay this back when you sell your property or pay this back sooner by increasing your equity stake.

We offer mortgages in conjunction with the Scottish Government’s range of shared equity schemes, including:

Help to Buy Mortgages

We offer mortgages in conjunction with the Government’s Help to Buy (Scotland) Affordable New Build Scheme. If you want to buy a new build home but can’t afford the total cost, you may be able to get help through the scheme. It provides help of up to 15% of the purchase price of an affordable new build home (from a participating home builder) and is available to both first-time buyers and existing homeowners who are looking to move home.

The Low-cost Initiative for First Time Buyers (LIFT) scheme

Up to 40% funding is available towards the purchase price with the LIFT scheme, which is aimed at first time buyers (terms and conditions apply). The scheme brings together a few different ways to help access homeownership, including:

  • The Open Market Shared Equity Scheme – to allow first time buyers to buy a property on the open market.
  • The New Supply Shared Equity Scheme – to allow first time buyers to buy a new build property from a Registered Social Landlord (RSL) – normally a housing association or housing co-operative.

For more information, contact our mortgage team on 0141 274 9933

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IMPORTANT INFORMATION

General:

  • For all above shared equity products, the maximum Glasgow Credit Union will lend is 85% of the property value.
  • All loans are subject to status and meeting our lending criteria, which will include a credit reference assessment.
  • Maximum loan to income is 4 x annual income (benefits can only be taken into consideration if they are payable for the full term of mortgage – evidence of this will be required). For non-contractual regular income such as bonuses or regular overtime, some of this income may be considered if proof available over a two-year period.
  • A higher lending charge may be applicable, depending on the amount you wish to borrow and the value/purchase price of your property. We charge 0.5% of the loan value for LTV between 85% and 90% and 1% of the loan value for LTV greater than 90%. The maximum you can borrow is 100% of the value or purchase price (whichever is lower) of your property.
  • An early repayment charge of 2% applies where a promotional rate product is repaid during the promotional rate period.
  • A redemption administration fee is payable when your mortgage is repaid in full, the current fee is £125.
  • A valuation fee may be payable, the fee noted in our illustration is an average, please contact the office to find out what the fee will be (if a fee is payable).

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE