Shared equity mortgage

Primary tabs

Shared equity mortgage is a type of mortgage where the lender keeps a portion, normally half, of the equity in the house. When a house is sold, the lender will be paid all of the loan plus their portion of the profits. Shared equity allows lower income individuals to receive mortgages because the lender has more security by owning part of the property. However, shared equities may come with other requirements like limiting who can purchase the home or limit the sale price later on because shared equity lenders are often trying to limit housing costs for low income individuals. 

[Last updated in July of 2021 by the Wex Definitions Team