The first phase of its interest-only launch, which is available to brokers on the panel from 23 June, is aimed at “financially savvy first-time buyers and homemovers” and is a full interest-only product.
The firm said this would be “ideal for young professionals and self-employed first-time buyers”.
The second phase is combining interest-only with its income booster proposition, so the income booster can contribute the repayment strategies and leave their investments, such as buy-to-let (BTL) property or pension pot, intact for longer. This is expected to be live in summer 2025.
The third phase is to offer part and part mortgages, where a borrower can top up a capital repayment mortgage with an interest-only portion to bolster affordability, or vice versa. The lender has slated this to go live in autumn 2025.
Gen H said the maximum loan to value (LTV) is 80% and the minimum household income is set at £50,000.
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The range will launch with a rate of 5.09% at 60% LTV and the term can go to the eldest borrower’s 75th birthday or retirement, whichever is earlier.
Acceptable repayment vehicles include sale of mortgaged property, which has a maximum 60% LTV and minimum £200,000 equity, sale of another property, investments, and pension, with regular savings, cash and bonus income coming soon.
The firm said that, based on its projections, an interest-only mortgage can deliver a 10-15% boost in affordability over a 30-year term.
Pete Dockar, chief commercial officer at Gen H, said: “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.
“I am confident that our panel of intermediaries will wield this new product with precision – interest-only can be a game-changer for the right financially savvy clients. We are delighted to bring this to market and look forward to launching phases 2 and 3 to support even more people in the coming weeks and months.”
Earlier this year, Gen H launched its New Build Boost, which is an alternative to Help to Buy.
