How to get started with Proportunity
1
Calculate your budget
Your home-buying budget is the sum total of your deposit, your mortgage, and the Proportunity Loan.
How it works
The amount you can borrow is dependent on your income and the size of the deposit you’ve saved.
What you need to do
Use our calculator to figure out how much you could afford.
While our budget calculator is pretty good, we can only take certain aspects into account. Please bear in mind that it won't get a full overview of your credit record and financial situation. Our calculator will show an indicative amount, which is a good basis on which to start your property search. Only a qualified mortgage broker can confirm your exact budget amount.
2
Find a home you love
You don’t have to use us to find your new home. However, if you do, we'll help you find a fantastic place that makes the most of your budget.
How it works
Our technology shows you the best areas to explore and tells you what a specific home is really worth. If you’ve found a home elsewhere, great, just submit it to us for an eligibility review.
What you need to do
Get started with your search criteria now to discover homes that are pre-qualified.
Since we are investing in your home alongside you, we are quite choosy about the homes we provide a loan on. To check whether a property is eligible, you'll need to add it to your Favourites List for us to evaluate it. While we offer loans on most property types, certain purchase types are excluded from the Proportunity Loan. For instance, we cannot lend on properties sold at auction, 'cash buyers only' homes, or shared ownership properties.
Your monthly payments are interest-only, however these payments do not go towards your Proportunity Loan amount. You can repay us in 3 ways:
Overpay
You can pay back more than just the interest on the loan. Any extra payments on top of your monthly interest payments decrease the amount of the loan you borrowed from us. That means your monthly interest will also go down as a result. Learn more about how Overpayment works here.
Remortgage
The Proportunity Loan is available at a fixed-interest rate of 5 years. This means after 5 years, the interest rate becomes variable and subject to change by the base rate set by the Bank of England. To avoid this uncertainty, many home buyers will aim to pay off the Proportunity Loan before the 5 year mark. If overpayment isn't an option or preferred, you can remortgage, which means taking out a brand new mortgage loan with Proportunity or a different lender. When you do this, you’ll pay off your existing mortgage. You can also use money from remortgaging to pay off the Proportunity Loan. Basically, you’re rolling the outstanding balances on your old mortgage and your Proportunity Loan into one mortgage. Learn more about how Remortgaging works here.
Wait until you sell your property
If you're looking to move up the property ladder, you can repay the Proportunity Loan when you sell your home.
Your Proportunity Loan will have the same term as the main mortgage you choose. You could make the minimum monthly payments (interest only) until you decide to sell. When you sell, money from the sale will pay off any remaining amount on the main mortgage and on the Proportunity Loan. Learn more about how Wait until you sell works here.
For all repayment options above, at the time of Overpay, Remortgage, or Sale of the property, your property will be valued so you can pay the same proportion you borrowed of the home value at the time of purchase.
We look at the property's price per square metre and compare it to that of similar properties sold in the same neighbourhood in the last year. Many other factors are also taken into account too, such as the condition of the property, and proximity to schools and public transport.
3
Apply for home finance
You finance the purchase of your home with your 5% deposit, the Proportunity Loan (to cover up to 25%), and a regular mortgage from a high street lender (to cover the rest).
How it works
The Proportunity Loan is an equity loan. It increases your budget by up to £150k, meaning you can buy a better place, sooner. Think Help to Buy but without the restrictions.
You will still need a regular mortgage too. We can put you in touch with a trusted mortgage adviser who can help, they will handle both finance applications for you at the same time. Once you’ve bought with Proportunity, you own 100% of your home (congratulations!)
What you need to do
If you’ve done your calculations, found an eligible home and have your deposit ready, you’re ready to apply for financing.
We've designed our shared equity loan to be similar to the government's Help to Buy scheme, but with fewer restrictions. You can use our loan for existing homes as well as new-builds, and you don't need to be a first time buyer. With Proportunity, you will be 100% owner of your home.
4
Repay the Proportunity Loan
Loan repayment
The Proportunity Loan is an equity loan. This means the amount you have to pay back is directly tied to future changes in the value of your home - we’re making an investment in your home.
If we give you a loan for 25% of the home’s value, you have to pay back 25% of the home’s value at the point of repayment. This applies whether your home goes up or down in value - we only win if you do.*
You can pay back the Proportunity Loan when you’re ready.
Interest payments
You will also need to make monthly payments to cover the interest of the loan. These begin immediately after taking the loan.
*The percentage increase or decrease of the loan to be repaid is relative to the original loan amount, not the overall appreciation or depreciation of the home.
The term of the Proportunity Loan will match the term of the main mortgage (typically 25-40 years). We offer a fixed rate interest for the first 5 years of the Proportunity Loan, after which it changes to a variable rate.
Put simply, interest is the fee paid for borrowing money - a bit like paying a rental charge on a hire car. We offer a fixed interest rate for the first 5 years of the Proportunity Loan. This means your monthly payments to Proportunity will stay the same for five years before interest payments change to a variable rate. This rate will fluctuate depending on the Bank of England's base rate.
The interest rates & cost of the loan will depend on the property you would like to purchase and your financial circumstances. As interest rates constitute financial advice, this would need to be confirmed with a mortgage advisor who can show you which rates apply for your specific case. You can get an idea of our average product in our illustrative example. Check out our interest rates page for more information: https://proportunity.co/interest-rates
Illustrative starting monthly payments assume an 80% LTV mortgage @2.84% 2 year fixed rate repaid over 35 years, plus a 10% LTV top-up second charge mortgage @5.99% fixed rate for 2 years followed by 8.49% fixed rate for 3 years interest-only reverting to a variable rate of Bank of England base rate + 9.99% (currently 10.99%). These are compared to the starting monthly payments of a 95% LTV 5 year fixed rate mortgage @3.05% repaid over 35 years and a 75% LTV mortgage @2.84% 2 year fixed rate repaid over 35 years, plus a 20% LTV top-up second charge mortgage @@5.99% fixed rate for 2 years followed by 8.49% fixed rate for 3 years interest-only (interest rates and CPIH as of 21 May 2022).
A second charge interest-only mortgage of £60,000, for a property purchase of £400,000, payable over 5 years would require 24 fixed monthly payments of £299.50 followed by 36 fixed monthly payments of £424.50. This is based on an initial fixed interest rate for 2 years of 5.99% followed by 3 years at a fixed interest rate of 8.49% after which time the interest rate reverts to 10.99% variable (Bank of England base rate, currently 1.00%, plus 9.99%) for the remaining 2 years. Assuming that the home value increases by 7.8% per annum (current CPIH) to £582,309 then at redemption in year 5 the shared equity amount due is £87,346 (original capital balance of £60,000 plus an additional shared equity increase of £27,346). The total amount payable would be £110,915 (loan amount including a £999 product fee paid upfront, plus £22,470 interest, plus the shared equity element and a £100 discharge fee). The overall cost for comparison is 15.0% APRC. If the property value decreases to £380,000 at redemption, the shared equity element due would be £57,000 and the total amount payable would be £80,569. The overall cost for comparison is 7.2% APRC.
