Shared equity schemes are designed to help eligible buyers enter the market sooner with a smaller deposit. Instead of borrowing the full amount, the government (or a participating body) contributes a share of the property price in exchange for an equity stake.
How shared equity works (in plain English)
- Lower deposit, lower repayments: Your mortgage is smaller because a portion is covered by the equity partner.
- Equity partner owns a stake: When you sell or refinance, they’re entitled to their share.
- Eligibility applies: Income caps, property price limits, and residency rules typically apply.
Potential benefits
- Enter the market sooner: Helpful for first home buyers or single-income households.
- Reduce LMI risk: A smaller loan can mean avoiding or reducing lenders mortgage insurance.
- Increase property choice: A higher effective budget may open more suburbs or property types.
Things to consider
- Future equity sharing: If your property value rises, the equity partner’s share rises too.
- Buyout options: Understand how and when you can purchase more equity.
- Ongoing obligations: Maintenance, insurance, and property use rules still apply.
Is it right for you?
Shared equity can be powerful—but it’s not one-size-fits-all. Consider your long-term goals, expected income growth, and whether you’re comfortable sharing gains in exchange for entering the market sooner.