Could a Part and Part Mortgage Help You Buy Your First Home?

If you’ve been saving hard, scrolling Rightmove late at night, and wondering if you’ll ever actually get onto the property ladder, this one’s for you.

A new type of mortgage is quietly gaining attention among first-time buyers who are ready to buy but keep getting knocked back on affordability. It’s called a part and part mortgage, and it could be the bridge you’ve been looking for.

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What Is a Part and Part Mortgage?

A part and part mortgage is exactly what it sounds like: part of your mortgage works on a standard capital repayment basis (where your monthly payments chip away at both the loan and the interest), and part of it is interest only (where you only pay the interest each month, not the actual loan balance).

This split structure lowers your monthly payments, which can make all the difference when a lender is assessing whether you can afford the mortgage.

It’s worth noting: at the end of your mortgage term, you’ll still owe the interest-only portion as a lump sum. So it’s not a free lunch, but it can absolutely be a smart stepping stone.

Who Offers This Mortgage?

Right now, one of the lenders leading the charge on this product is Gen H,  a lender specifically set up to help first-time buyers get onto the ladder. Their part and part mortgage is designed for people who are ready to buy but struggling to pass standard affordability checks.

Do You Qualify?

Here’s What You Need to Know To be eligible for Gen H’s part and part mortgage, you’ll generally need:

• A minimum 5% deposit
• A household income of at least £50,000
• To work with a broker who can tailor the interest-only split to your situation

The interest-only portion can be up to 80% of the total mortgage, but your broker will work out the right split for you. It might be 50/50, 60/40, or something else entirely,it’s totally individual.

A Real-World Example

Let’s make this real. Imagine a couple, both working, earning £35,000 each (£70,000 combined). They’ve saved £20,000 and want to buy a £400,000 home.

They’re currently renting and paying £2,000 a month.

On a standard repayment mortgage, their monthly payment would be around £2,157.

Their lender deems this unaffordable — despite the fact they’ve been paying nearly that amount in rent every single month.

Sound frustrating? It is. But here’s where the part and part mortgage changes the picture.

With a 50/50 split, half on repayment, half on interest only,their monthly payment drops to around £1,939.

That’s less than they’re currently paying in rent, and it passes the lender’s affordability test.

They’re in. They’re homeowners.

What Happens Next?

Getting onto the ladder is step one.

Step two is building towards a fully repayment mortgage over time.

Here’s how that might look:
• As your income grows, you can start making overpayments to bring down that interest-only capital balance.
• With some house price growth and the equity you build through your repayment portion, you may be able to remortgage onto a full repayment deal within five years.
• If you decide to stay put long-term, you could use the equity you’ve accumulated, potentially £200,000 or more after 30 years, to downsize or move to a less expensive area.

Is a Part and Part Mortgage Right for Me?

This product isn’t for everyone. If you can comfortably afford a standard repayment mortgage, that’s still the most straightforward route to owning your home outright.

But if you’re stuck in the rental trap, passing affordability checks is the wall between you and your first home — and a part and part mortgage could be the door through it.

As always, the key is speaking to a good mortgage broker who understands your full picture. This is a more complex product, but with the right advice it could be the thing that finally gets you moving.

 

Full Video Transcript
Welcome to On the Ladder, the series that helps you understand everything you need to know about buying your first home. I’m Sarah Tucker, and in every episode, I’m going to be guiding you through a different stage of the process. This is On the Ladder, and you’re about to take the next step. There is a new mortgage product available to help first-time buyers with just a 5% deposit. It’s being offered by a lender called Gen H who specifically try to support first-time buyers onto the ladder. This mortgage is part repayment and part interest only. That means for a portion of the mortgage, your monthly payments go towards payment and interest like normal. And for the other portion, your payment only goes towards the interest on your loan, not the capital balance. This means at the end of the term, you’ll have a balance to pay off. And you might be thinking, why would I want this? And this is a great question. When it comes to building equity in your home, a repayment mortgage is still the best option for many home buyers. But if you’re struggling to get a mortgage because of affordability, Gen H’s new part and part mortgage could help you bridge that affordability gap and finally break out of the rental cycle. You bring at least a 5% deposit and you can take up to 80% of your mortgage on an interest-only basis. Your broker will tailor this to you. The right interest-only portion for you could be 50% or 40%. It’s totally unique to you. You’ll need a household income of at least £50,000. And in the future, with some house price appreciation and the equity you build, you could remortgage onto a normal repayment mortgage. It’s a bit more complex than a standard mortgage, but your broker will guide you through it and it could help you buy your own home today. Let’s look at an example. Think of an average household, a married couple earning £35,000 each, no kids yet. They’re paying £2,000 a month in rent, but they’ve managed to save a £20,000 deposit. They want to buy a £400,000 home. They book a call in with their broker, and on a normal repayment mortgage, their monthly payment would be £2,157 per month. According to their bank, this would be unaffordable. So, they couldn’t get the full mortgage they need, even though they’ve been paying almost this much every month in rent. This could be a perfect scenario for a part and part mortgage. Say their broker puts 50% of the mortgage on capital repayment and 50% on interest only. That simple change brings down the monthly payment to £1,939 — less than they’re currently paying in rent and affordable by the lender’s standards. Over time, as they earn more money, they can overpay their mortgage to reduce that capital balance. And with the equity they’ll build with their monthly payments and some house price appreciation, in five years’ time they may even be able to remortgage to a full capital repayment mortgage. Equally they may choose to stay put and in 30 years they can use the £200,000 equity they’ll have to downsize to a less expensive area or property. Thank you so much for watching this episode of On the Ladder. Hit the subscribe button to be the first to know when the next episode drops. And please put in your comments any questions you have and we will cover them in future episodes. This has been On the Ladder and you just took the next step. See you next time.