A new mortgage calculator is to allow prospective buyers considering shared ownership to work out the total cost of purchasing a share of their property over the full mortgage term, not just the first year.
The free tool – created by an ex-Goldman Sachs technologist – enables users to 'stress test' their borrowing against future rent and interest rate rises, or service charge changes
It also allows borrowers to drill down into individual years to see the full monthly impact.
The idea behind the calculator is to give shared ownership borrowers who want to ‘staircase' to 100% ownership of their property more than just a yes/no estimate of whether purchasing an additional share is affordable.
The calculator, created by Natasha Brown, allows users to work out the full financial cost of staircasing multiple times and at any point in a mortgage.
More people are now eligible for shared ownership properties, after the income limits were increased to £90,000 in London and £80,000 in the rest of the UK.
"When I looked into the possibility of shared ownership myself, not only did I feel I was getting a hard sell from various housing associations but it was incredibly difficult to understand the overall cost, especially when it came to the prospect of staircasing to full ownership, which is what buying a home is all about,” says Natasha Brown, founder of the Shared Ownership Calculator.
“I also felt there were no tools available to help me stress test my ability to maintain payments when circumstances change in the future, which they invariably do,” she says.
"With certain other calculators, the 'What ifs' and potential risks facing borrowers seemed to be an afterthought rather than something that’s integral to the purchase process.”
With house prices still very high in certain areas of the country and income limits also recently increased, shared ownership is only likely to gain in popularity,” she predicts.
“Hopefully this calculator will help people to better understand the full financial impact and risks before they commit."