What is a Part and Part Mortgage?
A part and part mortgage splits your borrowing between interest only and repayment. For example, you might have £150,000 on repayment and £50,000 on interest only. This creates a middle ground - lower payments than full repayment but still paying down some capital each month.
The interest only portion still requires a repayment vehicle, but the amount you need to cover at term end is smaller. You'll pay off the repayment portion completely while owing the interest only portion at the end.
When Part and Part Makes Sense
Part and part can suit borrowers who want some capital repayment for security but find full repayment payments stretches their budget. It offers flexibility to manage cash flow while still building equity and reducing debt over time.
It might also suit those with partial repayment vehicles - enough assets to cover some but not all of a fully interest only mortgage. Splitting the mortgage reduces the amount you need your repayment vehicle to cover.
Lender Requirements
Lenders assess part and part mortgages by considering affordability of the combined payments and the repayment vehicle for the interest only portion. Not all lenders offer part and part, but many are flexible about the split between elements.
The LTV restrictions that apply to interest only typically also apply to the interest only portion of a part and part mortgage. You may need lower LTV or higher property values for the interest only element.
Compare Part and Part Options
Our brokers can help you explore whether a part and part structure suits your circumstances, comparing options from lenders who offer this flexibility. We'll explain how different splits affect your payments and end-of-term position.