The Intermediary – October 2025 - Flipbook - Page 19
RESIDENTIAL
Opinion
a month in rent, but they’ve managed
to save a £20,000 deposit. They book a
call in with their broker, their broker
runs a decision in principle, and they
hit a snag. That post-crisis aversion to
risk which grips high street lenders is
in full force.
Yes, they’ve been comfortably paying
£2,000 in rent. But the £2,157 payment
they’d face for a full capital repayment
mortgage? Unaffordable, the bank says.
That’s it. No path forward. They’re
stuck in a race against rising house
prices, trying to save a bigger deposit,
and paying their landlord’s interestonly mortgage all the while.
This is a perfect scenario for partand-part. Say their broker puts 50%
of the mortgage on capital repayment
and 50% on interest-only. That simple
change brings down the mortgage
payment to £1,939, which is affordable
– and less than they’re currently
paying in rent.
Over time, as they earn more money,
they can overpay their mortgage to
reduce that capital balance.
Thanks to the equity they’ll build,
and some house price appreciation,
in five years’ time they could
reasonably remortgage to a full capital
repayment mortgage.
Equally, they may choose to stay
put, and in 30 years, they can use
the £200,000 equity they’ll have to
downsize to a less expensive area
or property.
Does this mortgage bring risk with
it? Yes. But the only way to avoid risk
in a mortgage product is to never have
a mortgage.
The point is that these clients now
have options – and as the broker in this
story, you have options, too. The option
to help them take this step onto the
ladder today, and to support them in
two, five or even 10 years’ time as they
take their next step.
Holding the ladder
With a more complex product, good
advice is so important – both you and
your clients can benefit from building
and maintaining that long-term
relationship.
For millions of would-be
homeowners, the path onto the
housing ladder is shaky at best. If
we agree that homeownership is a
social good – community investment,
closeness with one’s neighbours,
future financial security – then we
must agree that tools like interestonly mortgages can play an
important role.
It’s your job to identify who
part-and-part mortgages may
be suitable for, and to educate
and empower them to access
homeownership if they
so choose. It’s our job to
interrogate the viability of
repayment strategies and
lend responsibly.
Together, we could
change the lives of
thousands of aspiring
homeowners – not
next year or next
month. Today. ●
