Available from 1 April, the scheme will see buyers secure their home in partnership with Places for People who will lend against a maximum of 40 per cent of the value of the property, with the Co-operative providing the mortgage on the remaining sum.
While most shared equity schemes see the buyer only owning a portion of their home, they will own 100 per cent of it under the Ownhome scheme.
Further to this, the Places for People loan will not incur interest during the first five years (rate of 1.75 per cent thereafter, rising to 3.75 from year 11 until cleared) and the borrower does not have to make any repayments within this period.
Key workers, social housing tenants and first-time buyers purchasing property worth less than £165,000 and earning less than £60,000 a year are eligible for the Ownhome scheme.
John Barker, head of mortgages for the Co-operative Bank said: “The Co-operative Bank is fully supportive of widening access to home ownership and is delighted to have been chosen by the Housing Corporation to launch a joint equity loan scheme in conjunction with Places for People.
"By offering our full range of competitive mortgages for the new Ownhome scheme, we will help provide key workers and first-time buyers with the essential financial support needed to take their first steps onto the property ladder.”
