The pioneering work that led to the development of the revolutionary EFM product has spawned similar initiatives overseas...

The United Kingdom and the United States

By way of example, the UK Government has recently invested GBP1 billion in an EFM-like scheme, called "Open Market HomeBuy", with leading UK lenders, HBOS, Nationwide, Yorkshire Building Society, and others.

The UK Government shared equity scheme was based in part on the 2003 Prime Minister's Home Ownership Task Force work. The Task Force report was authored by Rismark's founder and is explicitly referenced in the UK Office of the Deputy Prime Minister White Papers.

Under the terms of this scheme, 25% of the property's value is financed via a shared equity mortgage, which is in turn funded 50:50 by the lender and the UK Government. For more information on the UK Government's program, see here.

In the US and UK, there have been several similar, albeit-poorly designed, EFM-like initiatives, which have been commonly referred to as "shared appreciation mortgages".

Unlike an EFM, none of these products shared the risk of capital losses on the home owner's property with the borrower (in this sense, the EFM results in the lender sharing in either appreciation or depreciation, not just appreciation, which is obviously a much better outcome for the borrower).

In addition, these products tended to result in the lender taking more than 50% of the home owner's capital gains (sometimes even up to 75%).

The developers of the EFM have learnt from these experiences and engineered a much more equitable product design.

In particular, the developers of the EFM have been careful to always leave the borrower with at least 60% of the capital gains on their home.

It is important that the home owner enjoys the bulk of the benefits from living in their property. The developers of the EFM do not believe that it is fair or equitable to take more than 50% of the growth of any given property.

Note: EFMs are also sometimes known as equity mortgages, "shared equity" loans, shared appreciation mortgages (incorrectly, since under the EFM the lender may wear depreciation!), or silent partner loans.

Please carefully read and review the EFM Disclosure Document available on this website or through one of our accredited lenders. This website does not take into account your personal objectives, financial situation, or particular needs. You should obtain a copy of the EFM Disclosure Document (available on this website) and the EFM Terms and Conditions Booklet from one of our accredited lenders and consider them before making a decision about whether to enter into an EFM.