Gen H has launched the first phase of a new three-part interest-only mortgage proposition aimed at boosting affordability for a wider pool of borrowers – including first-time buyers traditionally excluded from such products.
The initial phase, which goes live to brokers on the lender’s intermediary panel today (23 June), offers full interest-only mortgages targeted at “financially-savvy” first-time buyers and home movers.
Gen H says this new tool could represent a 10–15% affordability uplift over a 30-year term, helping borrowers bridge the gap between renting and homeownership.
The lender’s staged rollout will continue over the summer and autumn, with two further phases.
INTEREST ONLY BOOST
The second will introduce “interest only with a boost”, allowing income boosters – such as parents or family members – to contribute to repayment strategies without liquidating long-term investments.
The third will enable “part and part” structures to combine capital repayment and interest-only elements to further enhance affordability, particularly for those with small deposits or partial repayment plans.
The new product range launches with a maximum loan-to-value (LTV) of 80% and a minimum household income requirement of £50,000. Initial rates start at 5.09% at 60% LTV, with terms available up to the eldest borrower’s 75th birthday or retirement – whichever is earlier.
Acceptable repayment vehicles at launch include the sale of the mortgaged property (up to 60% LTV and minimum £200,000 equity), the sale of another property, investments, and pension savings. Gen H says it plans to expand this to include regular savings, cash, and bonus income later this year.
The lender also highlights that brokers will be able to access detailed criteria via its searchable packaging centre.
SUPPORTING FIRST-TIME BUYERS
Pete Dockar, Chief Commercial Officer at Gen H, says: “Housing affordability challenges are here to stay, and helping everyone access homeownership and build long term wealth requires us to consider how familiar tools can be used in new ways.
“Interest only is a perfect example – it has long been considered a tool for the rich, but as one of the UK’s only lenders creating truly incremental homeowners, we believe it can support first-time buyers as well.
“An interest only mortgage can spell the difference between staying locked in the rental cycle or accessing homeownership and building meaningful wealth over time.
“What’s more – too often we expect aspiring buyers to either save or own, but for some, interest only can be the tool that lets them do both – while boosting affordability at the same time.”
