Lender Gen H has launched a new part capital repayment and part interest-only mortgage that can be accessed by first-time buyers with small deposits.

The home loan allows borrowers to take up to 80 per cent of their borrowing on an interest-only basis – meaning smaller repayments – with the remainder working as a normal repayment mortgage, allowing homeowners to build up capital.

The aim of the mortgage – available to any household with a combined income of at least £50,000 – is to help buyers who may not be able to afford a normal repayment mortgage.

These part and part mortgages are available from other lenders, but the Gen H deal is unique in being offered to those with just 5 per cent deposits.

How does the mortgage work in practice?

If two people collectively earning £70,000

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