Shared Home Ownership: A Smart Alternative to Traditional Buying for Young Kiwis

Are you one of many young Kiwis dreaming of owning a home but finding the traditional route just out of reach? You’re not alone. With rising property prices and hefty deposits, home ownership often feels like an impossible dream for first-time buyers in New Zealand.

But here’s the good news: shared home ownership offers a fresh way forward. It’s an innovative approach that allows you to step onto the property ladder without taking on the full financial weight of traditional buying.

So, how does it actually work — and could it be the key to making your dream of owning a home a reality? Let’s dive in.

What is Shared Home Ownership?

Shared home ownership is exactly what it sounds like instead of buying the entire property outright, you purchase a share alongside another party. Currently only YouOwn is providing such products in Aotearoa.

You get to live in the home as your own, while holding a percentage share of ownership. Over time, you can buy out more of the share and eventually become the sole owner.

The biggest advantage? A smaller deposit and lower overall mortgage, making the path to home ownership much more realistic for buyers who can’t quite stretch to full ownership right now.

How It Works in Practice: A Real Scenario

Let’s break down how shared home ownership can work in a real-life situation. Imagine you’re buying a home priced at $1,000,000 and have existing debts of $50,000. This brings the total funds required to $1,050,000.

Instead of funding the entire amount on your own, the purchase can be structured to make it more manageable. You might contribute $100,000 from your KiwiSaver, secure an $800,000 loan from a bank or non-bank lender like Basecorp, and have YouOwn contribute $150,000 as a co-investor.

For repayments, the YouOwn portion of $150,000 carries a 5.95% interest-only rate plus a $100 monthly account fee. That comes to roughly $744 in interest each month, and with the account fee added, your total YouOwn repayment would be about $844 per month. The initial Basecorp loan of $800,000 at 7.25% over a 30-year term would cost around $5,429 per month, combining principal and interest. However, many clients refinance the Basecorp portion to SBS after just a few months at a lower rate of 4.49% over 30 years, which reduces repayments to approximately $4,054 per month, making a significant difference to your monthly budget.

Comparing this to a traditional loan, which would mean you would have a mortgage of $900,000, on which you would repay $4,555/month plus a debt consolidation of $50,000 on which you would repay $1,189, which gives a total of $5,744/month, as compared to YouOWN’s deal, where you will only be paying $4,898 once you switch to SBS. This allows for a saving of almost $1,000/month on your repayments!!

It’s important to note that currently, SBS does not allow debt consolidation as part of YouOwn loans, whereas Basecorp does. That’s why most clients start with Basecorp for the initial funding and then refinance to SBS once eligibility criteria are met. At this stage, SBS and YouOwn are the only lenders providing YouOwn loans.

YouOwn’s contribution is not a traditional mortgage. Instead, they hold a 15% share in the property, recorded via a caveat on the title. You live in the home just like any other owner, while YouOwn shares in the property until you are ready to buy them out later.

The advantage is clear: rather than needing to fund the full $1,000,000 with just your KiwiSaver and a bank loan, you have a partner easing the financial burden. This makes securing your home faster and more achievable, giving first-time buyers a real path to homeownership.

Why Shared Ownership Appeals to Young Buyers

For many first-home buyers, shared ownership offers a stepping stone into the market. The deposit hurdle is lower, and monthly repayments are often more manageable than if you tried to take on the entire mortgage yourself.

It’s also flexible. Over time, as your income grows or your financial situation improves, you can increase your share by buying out YouOwn’s portion — steadily working toward full ownership at your own pace.

There’s also the security of knowing you’re no longer stuck renting. Even if you don’t own 100% of the home right away, you’re still building equity and investing in your future.

How It Compares to Traditional Buying

The key difference between traditional buying and shared ownership is the financial setup. With traditional buying, you need a large deposit (usually 20%) and you’re responsible for the entire mortgage from day one.

Shared ownership changes the equation. Instead of waiting years to save a full deposit, you can get into a home sooner with a smaller upfront contribution. Your monthly costs are also lower because your mortgage only covers your share of the purchase price.

Of course, there are trade-offs — YouOwn retains a share of your property, and when you eventually buy them out, it’s at the market value at the time. But for many Kiwis, that trade-off is well worth it to start building equity now rather than later.

Important Things to Consider

While shared ownership can be a game-changer, it’s important to go in with your eyes open.

- You’ll want to get legal advice before signing any agreement.

- Understand the terms clearly including how and when you can buy out YouOwn’s share.

- Think about your long-term financial goals and whether your income will allow you to increase your share over time.

Working with an adviser can help you weigh these factors and decide if this pathway is right for you.

Conclusion: Don’t Rule Out Home Ownership Just Yet

Shared home ownership is becoming a popular option for young Kiwis who are tired of waiting on the sidelines. By sharing the financial responsibility with YouOwn (alongside lenders like SBS or Basecorp), you can move into a home sooner, with lower upfront costs and the ability to build equity gradually.

If buying a house has felt out of reach, don’t give up on your dream just yet. Shared ownership could be the key to making it happen sooner than you thought.

At Mortgage Sense, we’re accredited advisers with YouOwn and their lending partners, which means we can guide you through the process and show you whether this could work for your situation.

Ready to see if shared ownership might be your path to homeownership? Let’s talk because sometimes, owning just a part of a home today is the smartest way to own all of it tomorrow. You can quickly fill out the quick assessment form below to get an estimate on how much you can buy at.