Gen H launches new "part and part" mortgages with just 5% deposits: “Perfectly timed for the current market”

LENDER Gen H has launched new "part and part" mortgages with just 5% deposits, with property experts saying it's “perfectly timed for the current market”.

Buyers need at least a 5% deposit and can take up to 80% of their mortgage on an interest-only basis.

A minimum household income of £50,000 is required.

Gen H says it's for buyers who can’t quite get the loan amount they need – they can add an interest-only portion of their choice to maximise their affordability. 

This launch comes after Gen H’s standalone interest-only product.

Pete Dockar, Gen H Chief Commercial Officer, added: “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 1. We are thrilled to make this product available to our broker panel and to the growing number of clients, who may now be able to support.”

Mortgage brokers said the products are desperately needed and will have “mass appeal”.

Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said it's a “great innovation”.

He added: "A great innovation that's perfectly timed for the current market. The opportunity for new buyers to set payments to fit their budget, whilst allowing full property ownership.

"Those with just a 5% deposit can also take up to 80% of the mortgage on an interest-only basis, allowing more to buy their first home, whilst making it affordable in those important early years. 

"With rates likely to be static for some time, this innovation is exactly the way borrowers will want to buy now, and once incomes are improved, they will be able to switch to a conventional repayment mortgage in a few years."

Omer Mehmet, Managing Director at Welling-based Trinity Finance, said the new product will “open doors” for first-time buyers.

He continued: “This product shows lenders, not government, are the ones doing the heavy lifting on affordability. Part and part mortgages won’t fix the housing crisis, but they will open doors for renters who’ve been locked out by rigid lending rules and the end of Help to Buy. 

"For many, it will feel like a lifeline compared with the compromises of shared ownership. If other big lenders don’t follow Gen H’s lead, they’ll risk being left behind.”

Ranald Mitchell, Director at Norwich-based Charwin Mortgages, agreed, adding: “This is a cracking product from Gen H that is going to have mass appeal to its intended audience. At a time when affordability blocks so many first-time buyers, this part-and-part solution is a smart, practical alternative to renting or being pushed into the compromises of shared ownership. 

"It allows buyers to own 100% of their home from day one, while flexing affordability by combining repayment with interest-only. That’s innovative but also sensible product design, and exactly the kind of thinking the market needs. 

"With the right advice, it could open the door to thousands of would-be homeowners who currently feel locked out. We need more lenders to look at creative routes like this. It’s supportive, timely and a genuine step forward in tackling the affordability gap.”

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, praised Gen H for the new product.

He continued: "The government has not been able to sort out the housing market so it is now down to the lenders. Gen H are doing things differently, and that is what the market needs. Is it enough to jump-start the market? Time will tell, but Gen H are doing more to try and help than Rachel has, that's for sure."

While welcoming the product, Rohit Kohli, Director at Romsey-based The Mortgage Stop, had concerns: "Gen H’s new part-and-part mortgage is a smart innovation that could help first-time buyers who can afford the monthly payments but struggle with a large deposit. With a 5% deposit and up to 80% of the loan on an interest-only basis, it makes homeownership more accessible.

"But the risk is clear: interest-only means the debt doesn’t reduce, so buyers could still owe hundreds of thousands in 20 or 30 years. If house prices fall or remortgaging options are limited, that’s a serious long-term concern.

“Gen H could strengthen this product with a safety net - allowing borrowers to automatically switch to repayment at year five or ten without new affordability checks, and by giving flexibility to shift portions from interest-only into repayment as finances improve. With these protections, the product could genuinely support first-time buyers over the long term.”