Is the private sector stepping up with a sustainable solution for wannabe buyers or is product merely a stopgap?
With Help to Buy gone and no new government scheme on the horizon, the challenge of first-time buyer affordability has shifted squarely to the private sector. One solution attracting attention is the hybrid, or “part-and-part,” mortgage - a structure that combines repayment and interest-only borrowing within the same product.
The question is whether such innovations can meaningfully replace the role Help to Buy once played, or whether they are merely a stopgap measure for a limited group of buyers.
The mechanics: Familiar, but evolving
Part-and-part mortgages are not new, but brokers highlight that the latest offerings push the boundaries on accessibility. Nicholas Mendes, mortgage technical manager at John Charcol, explained, “Part and part mortgages already exist… [but] the big advantage [of new products] is flexibility … borrowers who narrowly miss full repayment affordability can dial in an interest-only slice to bring the monthly cost within reach while still owning 100% from day one and retaining the ability to overpay.”
This flexibility, however, comes with a clear trade-off: the interest-only portion must eventually be repaid, requiring discipline and a long-term strategy.
Opportunities vs. risks
Mendes cautioned that the danger lies not in the product itself but in how it is used, “The risk lies in using the interest-only element purely to stretch affordability without a realistic repayment strategy. With sound advice, sensible loan sizing, and regular reviews, a part and part structure can be a practical way to bridge today’s affordability gap.”
Carolyn Dunion, of McKendry Dunion, echoed this need for careful handling, “These schemes do offer a great solution for many buyers and can really help bridge the gap … but buyers should always be aware that the interest-only element is not being routinely repaid. Proceeding with caution is the right approach here.”
She emphasised that adviser guidance is crucial to prevent borrowers facing stress at the end of the term: “The devil is always in the detail and there is no substitute for personally tailored advice.”
Market Impact: Supportive, not inflationary
Gen H is one lender that has launched a part-and-part mortgage with deposits as low as 5 per cent. The product allows borrowers to structure up to 80 per cent of their loan on an interest-only basis, with the remainder repaid in the traditional way. Applicants must have a household income of at least £50,000, and they can make overpayments to reduce the balance.
Can offerings like this fuel the housing market the way Help to Buy did? Brokers are sceptical. Mendes argued they are more likely to support transactions than drive up prices, “This kind of product is more likely to support transactions than to push prices materially higher. It primarily helps buyers who are already in the market but currently miss out on affordability, rather than creating a wave of brand-new demand.”
Kessar Salimi, of Freedom Financial, agreed on their value for renters, “Many buyers struggle to come up with the deposit or meet affordability requirements even though they are often paying rent which is higher than the new mortgage repayments. For this group, schemes like this are a genuine solution.”
Filling the void — or just bridging it?
Hybrid mortgages cannot replicate the scale of government-backed support, but they do represent an important evolution in lender-led innovation. They offer a way for some buyers to bridge the affordability gap in the absence of state schemes, without reawakening the risks associated with pure interest-only lending.
Whether they can truly “fill the gap” depends on three factors: borrower discipline, broker guidance, and lender pricing. For now, these products look set to play a supportive role in keeping transactions moving, rather than transforming access to homeownership on the scale that Help to Buy once did.
