Shared equity creates a symbiotic relationship between someone with a good income but little savings (you) and someone with a lot of savings (your equity partner). It works this way: The names of you and your partner appear on the title and the mortgage. Your partner pays all or part of the down payment. You both decide how to split the interest in the property (50-50, 60-40, etc.). Your partner is the "investor/co-owner" and does not live in the house. You are the "resident/co-owner." You live in the house. In order that your partner be allowed to depreciate his or her portion of the property rented to you, the mortgage, taxes, and insurance are split between the both of you. You then pay rent to your partner for his or her share of the house that you are using. Usually, this rent covers your partner's portion of the expenses. After three to five years you would refinance the home and buy out your partner (at fair market value) or the sell the home and divide the profit. Thus, the name "shared equity."