Ownhome can be considered redundant nowadays because of the introduction of the Help to Buy Equity loan which works off a similar premise but is more readily available.
What it is
Ownhome is a scheme provided by ‘Places for the People’ – a scheme initiated by the Co-Operative bank. It is an option that allows a customer a shared equity loan towards the purchase of a property on the open market.
How it works
Once a property has been chosen, normally via an estate agent, the client can apply for an equity loan for anywhere between 20 and 40 percent of the market value of that property.
For the first five years there are no interest charges, after this there is fixed rate of 1.75 percent interest per annum charged against the loan, after a further five years the interest rate is increased and fixed at 3.75 percent.
In order to apply for an Ownhome initiative, any further funds that need to be raised through a mortgage must be purchased through the Co-Operative, however any savings can also be put towards the deposit of the property.
Options after buying through Ownhome
The equity loan can be repaid at any point during the mortgage term however once the end of the term is reached the loan must be completely redeemed.
If the owner wishes to sell your property, the shared equity loan is repaid as a proportion of the market value of the property at its time of sale.
For further information on the Ownhome scheme: