Could a part-and-part mortgage help you on to the property ladder?
Combining repayment and interest-only mortgages could become more popular as part of a push towards more flexible lending
Part-and-part mortgages could become more popular as part of a regulatory review of mortgage lending rules.
The Financial Conduct Authority is considering an overhaul of the rules to boost lending to underserved groups such as first-time buyers and the self-employed.
The City watchdog said in its review that respondents suggested part interest‑only and part repayment mortgages could help consumers “access homeownership earlier”.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
[
SUBSCRIBE & SAVE
](https://subscribe.theweek.com/servlet/OrdersGateway?cds_mag_code=TWE&cds_page_id=275740&cds_response_key=I4BRBKSW1&utm_medium=referral&utm_source=theweek.com&utm_campaign=wku-all-digital_referral-202401-sub-none-fbk24&utm_content=us-in-article)
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
These part-and-part mortgages can provide a “unique solution” for borrowers, said Ascot Mortgages, by giving payment flexibility and a way to “gradually reduce mortgage capital”.
There are two main types of mortgage. With a “repayment” loan, borrowers pay off the amount borrowed and any interest. An “interest-only” mortgage involves only the interest being paid off each month and a lump sum is owed to cover the remaining capital at the end of the loan term.
A part-and-part mortgage provides a third option that combines both, said Unbiased, “where you pay off some of your mortgage but not the whole amount”.
Through this mix, mortgage payers secure lower monthly repayments, “while still ensuring the property is yours at the end of the term”, said Clifton Private Finance.
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com