Gen H has announced the launch of a part capital repayment and part interest-only mortgage product to support first-time buyers and those with small deposits.
Buyers who can’t quite get the loan amount they need can add an interest-only portion to maximise their affordability. Conversely, buyers who want an interest-only mortgage but don’t quite have the full repayment strategy sorted can top up with a capital repayment portion to make the numbers fit.
Under the new proposition, buyers bring at least a 5% deposit, take up to 80% of their mortgage on an interest-only basis, and the remainder of the mortgage on a capital repayment basis.
Buyers will need a household income of at least £50,000. They own 100% of their home from day one and can overpay as normal to reduce their capital balance.
The latest product launch follows the recent launch of Gen H’s standalone interest-only product.
In 2007, 50% of first-time buyers used interest-only products; today, that number has fallen to just 1%. However, this number increases to 18% of self-employed buyers, next-time buyers and remortgagers – groups who Gen H say are more likely to be financially-savvy.
Pete Dockar, chief commercial officer at Gen H, said: “For most people, the path to homeownership isn’t straightforward. In a country where the average house price is eight times the average salary – to say nothing of places like London – the best mortgage products are those that can be carefully tailored to suit the needs of individual buyers.
“Part-and-part mortgages do exactly that. No more renting. No need for family help. And unlike shared ownership, there’s no staircasing, no frustrating administration, and no rent to be paid; just 100% homeownership from day one. We are thrilled to make this product available to our broker panel and to the growing number of clients they may now be able to support.”
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, added: "Buying a home is one of the most significant ways to build wealth. In fact, our research shows that by continuing to rent, aspiring homeowners could be missing out on up to £340,000 in potential wealth acquisition over 30 years. However, many renters believe that owning a home is completely out of the question.
"The good news is that homeownership is often more accessible than people think. It's our job as brokers to shine a light on the many low-deposit solutions available, instilling more buyers with the confidence to buy sooner. We’re delighted to be working with Gen H on the launch of their new part-and-part mortgage, which will be a game-changer in helping even more reluctant renters become homeowners."
