Buying A Home? Discover The Equity Sharing Scheme

Buying a home is one of the biggest financial commitments many of us will make. Yet, for those over 30, it can also be challenging, especially if your income or age makes it hard to secure a full home loan, or if the amount you qualify for is not enough to cover today’s property prices. With rising costs and tighter lending criteria, owning a home can feel out of reach.

That is where the Equity Sharing Scheme comes in. This government initiative is designed to support people who, due to their age or income, cannot secure a full home loan on their own. Through a shared purchase arrangement with the Housing Authority, the scheme opens new doors to those who might otherwise be left behind.

In this article, we will explain how the scheme works, its key benefits and limitations, and how we, at APS Bank, can help you take the first step.

What is the Equity Sharing Scheme?

The Equity Sharing Scheme is a government-backed homeownership programme that helps individuals aged 30 or over buy their primary residence, even if they do not qualify for a full home loan due to income or age constraints.

Here is a clear breakdown of how it works:

• You identify a property valued up to €250,000.
• You are required to pay 10% of the purchase price as a deposit.
• You must purchase at least 50% of the property using your own funds and a home loan from a participating bank such as APS Bank.
• The Housing Authority covers the remaining share, which cannot exceed €100,000.
• After 20 years, you are required to buy back the Housing Authority’s share at the same original value paid by the Authority, no inflation or interest is added.

This scheme gives you time to stabilise financially while living in your home, with a long-term plan to eventually own 100% of the property.

Key Criteria and Conditions

Before you can benefit from the Equity Sharing Scheme, there are a few important conditions you will need to meet. These ensure that support is provided to those it is intended for and that the property being purchased qualifies for the scheme. Here is what you need to know:

• Age: applicants must be 30 years or older.
• Property value: the scheme applies to properties valued up to €250,000.
• Deposit: you must pay a 10% deposit from your own savings.
• Loan & ownership: you must fund at least 50% of the property through a combination of personal funds and a bank loan.
• Housing Authority share: the Housing Authority will fund the remaining share (up to €100,000).
• Buy-back period: you must buy out the Housing Authority’s share within 20 years at the original price they paid with no increase, regardless of the property’s market value.

What are the Pros and Cons of Using the Equity Sharing Scheme?

Like any support scheme, equity sharing comes with both pro and cons. While it can open the door to homeownership for many, it also involves conditions and long-term commitments that need careful consideration. Take a closer look at both sides.

Pros

1. Makes homeownership more accessible: this scheme is designed for people who would not otherwise qualify for full financing. It offers a practical way to move from renting into owning, even with limited income or borrowing power.

2. Lower monthly repayments: because you are only financing your portion of the property, your monthly repayments are lower compared to taking a full home loan on your own.

3. Reduced upfront costs: a deposit of just 10% is required, making it easier to meet entry costs without draining your savings.

4. Long-term stability: you will live in your home as a full-time resident while gradually working towards complete ownership over a 20-year period.

5. Fixed buy-back value: you are not exposed to rising property prices when it comes to repurchasing the Housing Authority’s share, the price remains the same as originally paid.

Cons

1. Property restrictions: only homes priced at or below €250,000 qualify, and they must be in a habitable, structurally sound condition. This limits your options in high-demand areas.

2. You do not fully own the home at first: until the Housing Authority’s share is repaid, full ownership and decisions like selling the home are restricted.

3. Long-term commitment: the 20-year timeframe to buy back the government’s share requires consistent financial planning and discipline.

4. Not for investment: this scheme is strictly for owner-occupiers. You cannot buy under the scheme for rental or resale purposes.

5. Income and loan assessment still apply: even though the government helps fund the purchase, you must still qualify for a loan on your share. If your income is too low, or if your credit history is poor, approval may still be challenging.

Is the Equity Sharing Scheme Right for You?

In a nutshell, this scheme is ideal if:

• You are 30 years or older and still renting or living with your parents.
• You have been turned down for a full home loan due to income or age.
• You are looking for a modest, affordable primary residence.
• You have adequate savings for the 10% deposit alongside stamp duty and notary fees applicable to the property you are planning to purchase.
• You are comfortable with a long-term commitment to gradually buy out the shared portion.

It is particularly suited for individuals or couples seeking a secure, manageable way to get on the property ladder, without the stress of taking on full market debt.

Get Started with APS Bank

At APS Bank, we are here to make your path to homeownership as smooth and stress-free as possible. If you are eligible for the Equity Sharing Scheme, our team will guide you through every stage, from application to approval and beyond.

We offer:

• Expert guidance on eligibility and application requirements
• Personalised home loan packages to suit your budget and plans
• Assistance with paperwork related to the Housing Authority
• 24/7 account access via myAPS mobile and internet banking

Ready to take the next step towards owning your home? Learn more about the Equity Sharing Scheme and fill out the form below to book an appointment with our team.

Approved and issued by APS Bank plc, APS Centre, Tower Street, B’Kara BKR 4012. APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994. Applications are subject to the Bank’s lending criteria. Terms and conditions apply and are available on apsbank.com.mt/terms-and-conditions.