Shared Ownership Mortgage Calculator

danielson81

Hi,

This may sound a stupid question but, as a very rough guide...

When using one of those "How much can I borrow" calculators, do you put the rent/service charge element under "committed monthly outgoings"

Eg, say it was £500 mortgage a month, and £500 rent/fees, you would have £500 monthly commitments.

According to one source, with a £30k salary they could potentially lend me £120k, however add £500 month commitment it becomes £62,508.

The property in question is £355k with a 30% share at £107k and £10k deposit.

binerds81

I am currently looking at a shared ownership property and from what I understand (although I could be wrong) then yes, the £500 rent & services charges are taken into account as monthly commitments because you have to make these payments on top of the mortgage payments each month and this will affect what the lenders see as affordability. If the mortgage is £500 and the service charge & rent portion is £500, then you have utility bills and council tax etc. on top of that, would that not stretch you financially each month with a £30k salary?

kingstreet

You will need to enter ground rent, service charge and shared ownership rent in a lender's affordability calculator, yes.

In addition, you will also need to satisfy the HCA's shared ownership calculator.

To be able to progress, you would need to take the output from the lower of the two calculations.

danielson81

Thanks, I thought so!

I also know I couldn't afford it.

kingstreet

I often find this.

The rent is 2.75% of the unowned share and this is higher than many mortgage rates, resulting in an outright purchase on a freehold basis being cheaper than shared ownership and leasehold.