Vida Homeloans has launched a part-and-part repayment option across most of its residential mortgage range in an effort to give brokers greater flexibility when addressing affordability.
The arrangement allows a mortgage to be divided between capital and interest and interest-only repayment methods, potentially lowering initial monthly payments while borrowers continue to reduce part of their outstanding balance.
The interest-only element is available up to 75% loan-to-value (LTV), subject to a maximum balance of £1m. Overall lending can reach 97% LTV, including fees added to the loan.
The option is available across Vida’s existing residential range, with the exception of Right to Buy and Right to Acquire applications. The lender said all its existing interest-only repayment strategies would continue to be accepted.
A single mortgage term will apply to both repayment elements. Where a product fee is added to the loan, it will be allocated to the capital and interest portion.
Leasehold properties financed using an interest-only or part-and-part mortgage must have at least 70 years remaining on the lease at the end of the mortgage term.
Vida said lending into or in retirement cases would be considered under its standard criteria. Potential repayment strategies for the interest-only portion include pension provisions, downsizing and other accepted sources of future funds.
The lender said the option could also suit younger borrowers seeking to limit their initial monthly commitments and high-net-worth customers wishing to retain liquidity while repaying part of their mortgage debt.
Dave Angel, managing director of mortgage product management at Vida Homeloans, said: “At Vida, we’re committed to giving brokers more ways to meet the needs of customers whose circumstances don’t always fit a standard approach.
“The introduction of Part & Part provides valuable flexibility, helping borrowers balance affordability today with clear plans for the future.
“Whether it’s younger customers looking to keep initial monthly payments manageable, clients approaching, or already in, retirement, or borrowers with credible repayment strategies and future assets, Part & Part gives brokers another practical solution to support a wider range of specialist residential cases.”
