Equity Share

EquityShare calculator

You need a minimum deposit of around 6.5% (9% for properties of £250K and above). If you leave Deposit blank, the calculator will assume you have 10%.

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Terms explained

Equity: 1. What is left in a property if you take away the mortgage and costs of sale. 2. What you grow by investing in a house or flat. Because the value of bricks and mortar is on an upward trend, while your mortgage is gradually paid off, the gap between the two grows wider over time; and this is serves to explain why many people invest in property as a way of saving money.

Shared equity: 1. A generic description of schemes where equity is shared between the occupier and an investor. 2. The name given by housebuilders to schemes where they hold back 15% - 25% of the property for up to 10 years so you get to buy in stages. As you don't pay rent on this share, this can be a good deal, so long as the builder isn't overpricing the house in the first place. 3. A name also given to government schemes like HomeBuy Direct, where grant money helps developers to sell off their surplus stock to people or households earning less than £60K. Works in a similar way to housebuilder shared equity.

Equityshare: 1. A special form of shared equity that relies on investors putting up the money to provide deposits for first time buyers (and others). Typically, the buyer puts up 10% and the investor 15% making it possible for the buyer to get a 75% mortgage, which is cost-effective. 2. An open market shared equity product that is not reliant on government funding, so it can be used for any property purchase by people of any income.

Increasing the mortgage term: A way of reducing the monthly payments on a mortgage by spreading it over a longer period. It is possible to have any period from 20 to 40 years, although if you can afford it, it's best to choose a shorter timespan as this way the property will become 100% yours much sooner.

Market value: The price at which you will have to buy out the shared equity partner when the time comes. Thus if in 5 years' time, say, the value of the property has gone up, you will have to pay a higher sum to acquire the investor's share. This however is offset by the fact that your own share will have grown much larger by comparison.

Refinance: What you do at the end of year 5 (or sooner if preferred) to buy out the investor's stake. Usually this would be done by remortgaging the property, taking advantage of the increased value of the property to obtain a higher mortgage.