Rent, Buy or Own
Shared equity
How does Shared Equity work?
Shared Equity is a form of home ownership assistance used in the United Kingdom and Australia.
It is designed to assist households who cannot buy a home in the area where they live and work because house prices have moved too far ahead of the maximum mortgage they can afford.
To overcome this hurdle, the government's new Shared Equity pilot scheme will see Housing New Zealand provide an interest free loan on a home an eligible household wants to buy. This means the mortgage the household has to raise and make repayments on is reduced.
The government's loan will exist as a second mortgage over the property. It has no interest costs, and requires no repayments until either the house is sold, or the loan term ends. At sale or at conclusion of the loan term, the household must repay the loan to Housing New Zealand. If the value of the property reduces or increases, so does the equity share, and the amount that must be repaid.
The homeowner pays all costs of ownership, such as rates and maintenance.
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