Just wondering if somebody could give me some much needed information on shared ownership?
I have been told the basic outline is that you choose a house and pay for a min of 40% of it then pay the mortgage on that % then pay the council rent for the left over amount? can somebody let me know the figure of rent paid in respect to the council and what % do you have to give them if deciding to sell the home?
Im just confused by the lack of and different information posted everywhere. I will be applying to South dublin co Council.
Cheers
Mat
Its actually quite straight forward. You borrow say 200,000 from the council.
Then the amount borrowed is split into two half’s, generally split down the middle, hence the term 50/50.
You can then think of one half as a regular mortgage which you pay back every month as you would with any mortgage.
You can think of the other half as an interest only mortgage where you pay back the interest only on the amount. This is also know as the rent on the other half. Its not really rent you are just basically pay interest on this portion and thus you are never actually paying off the second part of the loan. You can reduce this part of the loan every year or so.
Calculations:
House cost 200,000
Mortgage portion (50%) 100,000 over 30 years at 5% would mean you would be paying back about 530 euro.
Council portion (50%) interest on 100,000 over 30 years at 5% would men you would be paying back about 260 euro in interest (or rent as they call it).
Total payment would be:
530 + 260 = 790.
Of course at the end of the 30 years you would still owe the council 100,000.
Most simplest way to think of a shared ownership loan is part repayment mortgage part I/O mortgage.