Help to Buy vs Shared Ownership Calculator UK 2026

Help to Buy vs Shared Ownership Calculator

Enter your figures below. The calculator models monthly costs, total annual outgoings, and 10-year equity build under each scheme using realistic 2026 assumptions (4.95% 5-year fixed mortgage rate, 2.75% Shared Ownership rent, 3% property appreciation, 250/month service charge).

Help to Buy: Equity Loan — closed, what existing borrowers should know

The Help to Buy: Equity Loan scheme operated from April 2013 to March 2023. Under the scheme, the UK government lent first-time buyers of new-build homes between 5% and 20% of the property value (40% in London from February 2016 onwards), interest-free for the first five years. Buyers contributed a minimum 5% deposit and took a mortgage covering the remaining 75% (55% in London). The scheme was open only to FTB on properties at or below a regional price cap.

The 2021-2023 phase of the scheme imposed regional price caps as follows:

Interest schedule for existing borrowers

Existing HTB borrowers — those whose loans completed before 31 March 2023 — retain the original interest schedule on the equity loan:

• Years 1-5: Interest-free
• Year 6: 1.75% of the loan amount
• Year 7+: Previous year's rate × (1 + RPI%/100 + 2%), or for newer loans, (1 + CPI%/100 + 2%)

On a £60,000 equity loan, the year 6 interest payment is £1,050. With RPI assumed at 3.0%, year 7 rises to roughly £1,103, year 8 to £1,158, year 10 to £1,277 — and the loan amount itself remains the same percentage of the property's current value, meaning the capital repayment also rises with property prices.

Repaying the equity loan

The equity loan must be repaid when:

1. You sell the property — the loan is repaid at 20% (or 40%) of the sale price, not the original loan amount
2. You repay early (full or partial 'staircase out') — at 20%/40% of the current open market value, verified by a RICS valuation
3. You reach the end of the 25-year mortgage term
4. You die (the loan is repaid from estate proceeds)

A £60,000 loan on a £300,000 property bought in 2018: if the property is now worth £400,000 in 2026, repaying the loan costs £80,000 (20% of £400k), not the original £60k. Property appreciation drives loan repayment costs; conversely, falls in value reduce the repayment.

Shared Ownership: the 2026 new-model lease

Shared Ownership in England is delivered under the Affordable Homes Programme 2021-26, with new-model leases mandated for all properties commissioned from April 2021 onward. The new model improves on the legacy lease in five material ways: minimum 25% share reduced to 10% in some cases, the 1% staircasing right per year, 990-year lease term (vs 99-125 years on older leases), a 10-year initial repairs covenant by the landlord, and a clearer rent-review formula capped at RPI+0.5% or CPI+1%.

How Shared Ownership works

1. Buyer purchases between 10% (new model) or 25% (older leases) and 75% of the property's full market value.
2. Buyer takes a residential mortgage on the share, with a deposit of typically 5-10% of the share value.
3. Housing association (registered provider) retains the unowned share and charges rent at no more than 2.75% of the unowned value per year (some older leases at 3.00%).
4. Buyer pays mortgage + rent + service charge + insurance + utilities monthly.
5. Buyer can 'staircase' — buy more shares — at any time via 1% increments (annual, new model) or 5-10% chunks (anytime, both models). Each staircase requires a fresh RICS valuation and uplift to the current market price.
6. Once 100% staircased, the property converts to standard leasehold (flats) or sometimes freehold (houses) without rent on the formerly unowned share.

Eligibility criteria 2026

• Household income below £80,000/year outside Greater London (£90,000 inside Greater London)
• Unable to afford to buy a suitable home on the open market
• Not currently owning a residential property in the UK or abroad (or in the process of selling one)
• Aged 18+
• Right to live and work in the UK (or settled status, or appropriate visa)
• Demonstrable affordability — household income must be at least 1.6× the annual outgoings (rent + mortgage + service)
• Pass the housing association's financial vetting (credit check, deposit verification, mortgage agreement in principle)

Some local authorities operate additional 'local connection' tests (lived/worked in the borough for X years), particularly in high-demand areas in London, Brighton, Cambridge and Oxford. Always check the specific scheme's eligibility on the developer's brochure.

Rent calculation

Rent is calculated as unowned percentage × full market value × rent percentage. On a £300,000 property with 50% Shared Ownership at 2.75% rent:

• Unowned share value: 50% × £300,000 = £150,000
• Annual rent: £150,000 × 2.75% = £4,125
• Monthly rent: £344

The rent escalator is contractual: under the new model lease, rent increases on each anniversary at the lower of (CPI + 1%) or another contractually-agreed figure, capped at RPI + 0.5% in some leases. Over 30 years, even modest annual escalators compound materially — RPI averaging 3% means rent in year 30 is roughly 2.5x the starting rent. Source: gov.uk/shared-ownership-scheme.

Worked example 1: £300,000 property with 50% Shared Ownership

A first-time buyer purchasing a £300,000 new-build flat in Manchester. They buy 50% (£150,000) with a 10% deposit (£15,000) and a £135,000 mortgage at 4.95% over 30 years.

Monthly costs

Initial deposit + costs: £15,000 (10% deposit) + £2,200 stamp duty (FTB no SDLT below £425k under either election) + £1,500 legal + £350 valuation + £150 searches = roughly £19,200 cash outlay at completion.

10-year picture

By year 10, the buyer owns 50% of a £403,180 property = £201,590 of equity. Mortgage outstanding = £105,470. Net equity = £96,120 (their initial £15,000 deposit + £29,530 capital repayment + £51,590 share of property appreciation). Total mortgage payments over 10 years: £86,520. Total rent paid: £41,250 (rising with escalator). Total service charge: £30,000. Total outlay: £157,770. Net wealth gain: £96,120 - £15,000 = £81,120, equivalent to £8,112/year of unrealised appreciation + capital repayment.

Worked example 2: £450,000 London Shared Ownership at 30%

A London first-time buyer in Tower Hamlets, household income £75,000 (within £90,000 London cap), buying a £450,000 new-build apartment. They purchase 30% (£135,000) with a 10% deposit (£13,500), £121,500 mortgage at 4.95% over 35 years.

Compare to renting a similar London 2-bed at £1,950/month (average per Office for National Statistics ONS Index of Private Housing Rental Prices Q1 2026 for Tower Hamlets). Shared Ownership saves £198/month vs renting (£2,376/year). Over 10 years at 3% London appreciation, the 30% Shared Ownership share gains £40k of value plus the buyer pays down £15k of mortgage capital — total £55k of wealth accumulation versus zero from renting.

First Homes scheme: 30-50% discount, FTB only

First Homes is an English new-build scheme requiring developers in qualifying areas (typically Section 106 affordable housing contributions) to sell at least 25% of homes at a discount of 30-50% off open market value to local first-time buyers. The scheme launched in 2021 and remains active in 2026.

Eligibility

• First-time buyer (no current UK or overseas property ownership)
• Household income below £80,000/year (£90,000 inside Greater London)
• Maximum purchase price after discount: £250,000 outside London, £420,000 inside London
• Mortgage covering at least 50% of the discounted price (deposit + mortgage = 100% of discounted price)
• Local connection — some councils require living/working in the area for 3+ years

The permanent discount

Crucially, the First Homes discount is permanent — when you sell, you must sell at the same percentage discount applied to the new market value, preserving the discount for the next eligible buyer. A 30% First Home purchased in 2026 for £210,000 (market value £300,000) — if market value rises to £400,000 by 2034, the resale price is capped at 70% × £400,000 = £280,000, not £400,000.

This contrasts with shared ownership where the buyer can staircase to 100% and sell at full market value, and with Help to Buy where the buyer also reached 100% ownership immediately. The discount is the trade-off: First Homes locks the property into the affordable housing stock permanently.

Comparison: First Homes vs Shared Ownership at £300k

First Homes wins on monthly cost (no rent) and equity capture, but is less flexible (cannot staircase, must sell to next eligible FTB at locked discount). Source: gov.uk/first-homes-scheme and homesengland.gov.uk/programmes/first-homes.

Lifetime ISA: the deposit-saver's option

The Lifetime ISA (LISA) is a tax-advantaged savings account for buyers under 40, offering a 25% government bonus on contributions up to £4,000/year. The bonus is paid monthly into the account, and the funds compound. Withdrawals are tax-free if used to buy a first home worth up to £450,000 or after age 60 for retirement.

How much can you accumulate?

LISA traps to avoid

• Property price cap £450,000. If the property you buy exceeds £450,000, you cannot use LISA funds for the deposit without triggering the 25% withdrawal penalty. For London buyers, this can be restrictive.
• 12-month minimum holding period. The LISA must be open for at least 12 months before funds can be withdrawn for a property purchase. Open the account early (even with £1) to start the clock.
• Withdrawal penalty 25%. Withdrawing for any purpose other than first home or retirement triggers a 25% penalty — which actually loses you 6.25% of the original contribution (because the 25% claws back the bonus plus a fraction of the original).
• Cash LISA vs Stocks LISA. For short saving horizons (1-3 years), a cash LISA is appropriate. For 5+ years, stocks & shares LISA historically yields materially more — but with volatility risk.
• Age cap 39. Must open the account before age 40 and stop contributing at age 50.

The Money & Pensions Service via moneyhelper.org.uk/en/savings/types-of-savings/lifetime-isa provides the authoritative consumer-friendly summary.

Mortgage Guarantee Scheme (95% LTV)

The Mortgage Guarantee Scheme, originally launched in April 2021 and extended via successive Budgets through 2026 and beyond, helps creditworthy buyers with only a 5% deposit obtain a mortgage on properties up to £600,000. The government provides a partial guarantee to lenders on a portion of losses from defaults, reducing lender risk and unlocking 91-95% LTV products.

Participating lenders 2026

• Barclays
• HSBC
• Lloyds
• NatWest
• Santander
• Halifax
• Virgin Money
• Yorkshire Building Society

Eligibility

• UK residential purchase (not buy-to-let or second home)
• Property value up to £600,000
• Repayment mortgage (not interest-only)
• Deposit of 5%-9% of property value (LTV 91%-95%)
• Open to first-time buyers AND existing homeowners (unlike the closed HTB)
• Pass the lender's standard affordability assessment

Rates are typically 0.30-0.60% higher than the equivalent 75% LTV product but materially below specialist 95% LTV without a government guarantee. On a £300,000 property with 5% deposit (£15,000) and £285,000 mortgage at 5.25% over 30 years, the monthly payment is £1,574 — workable for a household income of roughly £55,000+.

Stamp duty implications for first-time buyers

From April 2025, the SDLT thresholds for first-time buyers reverted to: 0% on the first £300,000 of consideration (originally £425,000), 5% on £300,001-£500,000, and standard rates above. Non-FTB pay 0% on the first £125,000 (or £250,000 if higher threshold applies temporarily). Always verify with HMRC's SDLT rates page at the time of your transaction.

SDLT on Shared Ownership

Shared Ownership buyers choose between two SDLT treatments at initial purchase:

1. Market Value election: Pay SDLT on the full open market value of the property upfront. No further SDLT on subsequent staircasing transactions. Best for buyers expecting to staircase to 100%.
2. Initial transaction only: Pay SDLT on the share purchased plus the rent NPV (Net Present Value of rent over the lease term). Further SDLT on staircasing transactions above 80% ownership. Best for buyers staying at low share.

Worked SDLT calculation

£300,000 property, 50% Shared Ownership, FTB:

• Market Value election: SDLT on £300,000 = 0% × £300k = £0 (under FTB threshold)
• Initial transaction only: SDLT on £150,000 (share) + rent NPV approximation = £0 (under FTB threshold) plus £0 on rent NPV

At this price point, FTB SDLT is £0 either way. Above the FTB threshold of £300,000, the election matters materially. A £500,000 SO purchase (50% share = £250,000): Market Value election = 0% on £300k + 5% on £200k = £10,000 SDLT upfront; Initial transaction = £0 SDLT but potentially £6,250 SDLT on the next staircase to 80%+.

Selling a Shared Ownership home: the nomination process

Reselling a Shared Ownership home before staircasing to 100% requires going through the housing association's nomination process. Under the new model lease (April 2021+), the housing association has an 8-week 'nomination period' to find a buyer at a price set by a RICS valuation funded by the seller. Under older leases, the nomination period is 21 weeks.

1. Week 0: Seller commissions RICS valuation (£250-£500) and notifies housing association of intention to sell.
2. Week 1-8 (new model) or 1-21 (older lease): Housing association markets to its waiting list of approved Shared Ownership applicants. Sale proceeds split per ownership percentage at the agreed price.
3. Week 8/21 onward: If no buyer found within nomination period, seller can market to any eligible buyer on the open market, but the buyer must still meet Shared Ownership eligibility (income cap, FTB or downsizer).
4. Completion: Conveyancing solicitor handles the share transfer; housing association consents on a standard form.

What if you have staircased to 100%?

Post-100% staircasing, the property usually converts to standard leasehold. The lease may include a 'right of first refusal' clause requiring the seller to offer the property to the housing association first at market price, but if declined the property can be sold on the open market without nomination restrictions. Always check the specific lease clause — they vary across providers.

Common mistakes and how to avoid them

• Buying maximum share possible to avoid rent. Buying 75% (max under older model) means £225,000 mortgage on a £300k property — affordability stretches uncomfortably. Buying 25-40% is often cheaper monthly and preserves affordability headroom for rate rises.
• Ignoring service charge inflation. A £250/month service charge can rise to £400+ within 5 years if maintenance issues emerge or freeholder fees increase. Always request 3 years of historical service charge accounts before exchange.
• Not factoring in the rent escalator. RPI+0.5% over 30 years compounds significantly. Model the monthly cost at year 10, 20 and 30 using realistic RPI assumptions before committing.
• Missing FTB SDLT election. Most FTB elect to pay SDLT on the full market value if the property is under the FTB threshold, because it avoids future staircasing SDLT — but get this in writing from your conveyancer.
• Buying off-plan without a completion deadline. Off-plan Shared Ownership purchases on stages of construction can suffer 6-18 month delays. Insist on a 'long-stop date' in the contract — typically 24 months from exchange.
• Not budgeting for staircasing. Each staircase costs £600-£1,200 in legal fees, £350-£500 in RICS valuation, and a new mortgage product fee (£999-£1,500). Plan the staircasing path before initial purchase.

Frequently asked questions

Is Help to Buy still available in 2026?

No. Help to Buy: Equity Loan closed to new applications on 31 March 2023. Existing borrowers retain the original terms (5 years interest-free, then 1.75% in year 6, rising RPI+2% or CPI+2% annually). Welsh equivalent closed March 2025. Scotland's First Home Fund closed February 2021. New buyers should explore Shared Ownership, First Homes, Mortgage Guarantee Scheme, or Lifetime ISA.

What is the difference between Help to Buy and Shared Ownership?

Help to Buy gave 100% ownership immediately with an equity loan to repay at future property value. Shared Ownership splits ownership between buyer (25-75%) and housing association, with subsidised rent on the unowned share. HTB had a defined endpoint (repay loan or pay interest); Shared Ownership requires staircasing to reach 100%.

What are the income caps for Shared Ownership?

£80,000/year household combined gross income outside London; £90,000 in Greater London. Some local authorities add local connection requirements on top.

How does staircasing work?

Buyers can buy additional shares — under the new model lease (2021+), 1% per year for the first 15 years at indexed valuation; or 5-10% chunks at any time requiring fresh RICS valuation, legal fees and new mortgage. Each staircase reduces rent proportionally on the unowned share.

What is the First Homes scheme?

English scheme requiring developers to sell 25%+ of new-builds at 30-50% off market value to local first-time buyers. Income cap £80k/£90k London. Property cap £250k/£420k London. The discount is permanent — preserved on every resale.

What is a Lifetime ISA?

Tax-advantaged savings account for under-40s. Contribute £4,000/year, government adds 25% bonus (up to £1,000/year). Use tax-free for first home up to £450,000 (12-month minimum holding) or retirement at 60. Withdrawing for any other reason triggers 25% penalty.

How is rent calculated on Shared Ownership?

Annual rent = unowned share value × 2.75% (newer leases) or up to 3.00% (older). On £300k property with 50% SO, rent = £150,000 × 2.75% = £4,125/yr = £344/month. Annual escalator typically RPI+0.5% or CPI+1%.

What are the disadvantages of Shared Ownership?

Rent escalator compounds over 30 years; leasehold restrictions (subletting bans, pet rules); slower resale (8-21 week housing association nomination); limited mortgage availability; staircasing premiums rise with market; service charge inflation risk.

Can I use a Lifetime ISA for Shared Ownership?

Yes, provided the property's full market value is under £450,000 (not just the share price). FTB status, 12 months from LISA opening, and primary residence rules apply.

What happens if I want to sell my Shared Ownership home?

Housing association has nomination rights for 8 weeks (new model) or 21 weeks (older). If no buyer found, can sell to anyone meeting eligibility. Post-100% staircasing, may have 'right of first refusal' but typically open-market.

What is the Mortgage Guarantee Scheme?

UK government scheme launched April 2021 (extended through 2026+). Government partially guarantees lender losses on 91-95% LTV mortgages up to £600,000 property value. Available to FTB and existing homeowners. Rates 0.3-0.6% above 75% LTV products.

How does Shared Ownership compare to renting?

Similar monthly cost (£900-£1,800 city flat). Shared Ownership builds equity in owned share + property appreciation. Break-even vs renting at 5-7 years with 3% appreciation. Main risks: stamp duty, illiquid resale, leasehold service charges.

Are there stamp duty advantages for Shared Ownership?

Yes. Buyers choose Market Value election (SDLT on full value upfront, none on staircasing) or Initial transaction only (SDLT on share + rent NPV, more on later staircasing >80%). FTB SDLT relief: 0% under £300k, 5% to £500k.

What if I do not qualify for Shared Ownership?

Six main alternatives: First Homes (30-50% discount), Mortgage Guarantee Scheme (95% LTV), Lifetime ISA (save £4k+£1k bonus/yr), Discount Market Sale (local authority schemes), Right to Buy/Right to Acquire (for council/HA tenants), Co-Ownership Northern Ireland.

Glossary

• Affordable Homes Programme: Homes England funding programme delivering Shared Ownership and other affordable housing.
• CPI: Consumer Price Index, primary measure of UK inflation.
• Discount Market Sale (DMS): Local authority schemes selling new-builds at 20-30% off market value with discount preserved on resale.
• FTB: First-Time Buyer — no current UK or overseas residential property ownership.
• Help to Buy: Equity Loan: Closed scheme that lent up to 20% (40% London) of property value interest-free for 5 years.
• Homes England: The English government housing agency administering Shared Ownership, Affordable Homes Programme and First Homes.
• HM Land Registry: UK government department registering property ownership and charges.
• Leasehold: Form of property ownership where the buyer owns the property for a fixed term (typically 99-999 years) but the land is owned by the freeholder.
• LISA: Lifetime ISA — government 25% bonus on £4,000/yr contributions for first home or retirement.
• LTV: Loan-to-Value, the mortgage as a percentage of property value.
• Market Value Election (MV): Shared Ownership SDLT option to pay tax on full market value upfront.
• Mortgage Guarantee Scheme: UK Government 95% LTV mortgage backing scheme.
• Nomination period: Window during which housing association can find a buyer for a Shared Ownership resale.
• RICS: Royal Institution of Chartered Surveyors, the professional body whose members provide approved valuations.
• RPI: Retail Price Index, an older UK inflation measure still used in some indexation clauses.
• Section 106: Planning agreement under Section 106 Town and Country Planning Act 1990 imposing affordable housing obligations on developers.
• SDLT: Stamp Duty Land Tax — UK government tax on property purchases.
• Service charge: Annual fee paid by leaseholders for building maintenance, insurance and management.
• Shared Ownership: Part-buy, part-rent scheme allowing 10-75% initial purchase from a housing association.
• Staircasing: Buying additional shares in a Shared Ownership property up to 100%.

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About this calculator

Last updated 25 May 2026 by Mustafa Bilgic, independent operator of UK Calculator (Adıyaman, Turkey — see About). Figures cross-checked against the Affordable Homes Programme 2021-26, the Model for Shared Ownership (April 2021 onward), Homes England published rent and income caps, GOV.UK Help to Buy scheme documentation, HM Land Registry UK House Price Index, and HMRC SDLT residential rates. This is general information only and does not constitute regulated mortgage advice or tax advice. Always consult an FCA-authorised mortgage broker, a conveyancing solicitor and (where staircasing or selling) a qualified tax adviser before signing any agreement.