Sharing the cost of buying a home

Discover different ways to get on the property ladder

Buying your first home is an exciting time, but it's also a big financial commitment. So it's important to understand all your options. One option is to apply for a traditional mortgage, but if you're struggling to save for a deposit, don't worry. There are other options available that allow you to spread the cost of buying and get on that property ladder.

Your three main options

There are three main ways to spread the cost of buying your first home. Depending on the amount of deposit you have, how much you can afford to borrow, whether you want a new or existing property or if you want to own 100% of your home, one of these might be right for you.

Option 1: Help to Buy equity loan scheme

The Government-backed Help to Buy equity loan scheme can give you a helping hand to get moving. (Please note HSBC does not offer mortgages in respect of properties being purchased under this scheme).

Help to Buy equity loan: the Government will lend you up to 20% of the value of your new build home which could initially help reduce your monthly repayments.

  • You only need a 5% deposit which means that you only need to borrow 75% of the value of the property you wish to buy.
  • You will own 100% of your home
  • Your equity loan is interest free for 5 years

Option 2: Shared ownership schemes

Shared ownership is an affordable home ownership scheme where you part own, part rent a property from a housing association.

The way it works is simple:

  1. You buy a share of the property, which is normally between 25% and 75%, and pay rent on the share you don't own at a discounted rate. Because you're not buying the whole property outright, you can take out a smaller mortgage and benefit from lower monthly repayments.

  2. You can buy the remaining share in stages until you own 100% of your home. You can do this in your own time, as you can afford it, to suit your financial situation.

Option 3: Shared buying with family or friends

If you're happy to share your home with a friend or family member, you could pool your financial resources and buy together. Not only would this give you a bigger deposit and the freedom to get a bigger mortgage, but you could share the cost of mortgage repayments, bills and maintenance.

As appealing as this option may seem, you need to think of it as a business deal. What if your circumstances change in the future and someone loses their job, gets behind with the bills, or wants to sell their share of the property? It makes financial sense to ask a solicitor to draw up a 'tenancy in common Tooltip: Definition: A legal agreement that states the property belongs to two or more parties and the specific share each person owns.' agreement so you both know what's expected of you.

What might your agreement cover?

  • What share of the property you each own
  • How much you contributed to the deposit and mortgage
  • How will you share maintenance costs
  • If and how you'll rent out rooms
  • What happens if one of you wants to sell