Analysis by Gen H ahead of the end of the consultation on July 28 shows that 47% of the top 100 brokerages wrote no interest-only mortgages for first-time buyers in 2025.

Of the 53 brokerages that wrote any interest-only business for FTBs, this comprised an average of just 0.25% of their FTB volumes.

Directly authorised brokerages were twice as likely as appointed representatives to use interest-only products with first-time buyers.

Gen H says take-up of its own interest-only proposition by FTBs is much higher than the industry average.

It offers a part-and-part proposition, with up to 95% loan-to-value on interest-only and the rest on a repayment basis.

To date, 18% of the lender’s interest-only and part-and-part applications have come from first-time buyers.

This is 7.5 times higher than the industry average, where less than 2.5% of all interest-only products are taken by first-time buyers.

In its consultation paper, the FCA describes its proposals as targeted rather than a wholesale relaxation of the rules around interest-only lending.

However, its feedback statement (FS25/6), published in December 2025, found that since 2013 sales of interest-only products to first-time buyers have remained below 0.5% of all first-time buyer mortgages.

The figure has not shifted even after the FCA withdrew its more restrictive interest-only guidance, FG13/7, earlier in 2025, suggesting the intermediary market may still be hesitant to embrace these products for first-time buyers.

Gen H distribution director Sara Palmer says: “A year on from launching our interest-only proposition, we have been really pleased to see so many first-time buyers take an interest-only mortgage with us.

“When we look at the cases, we see there’s no other way the affordability could have worked – these are mortgages that are fine-tuned to the borrower with the help of their broker.

“These are clients that brokers weren’t previously able to support.

“In targeting affordability constraints or helping keep monthly payments lower, interest-only products can create truly incremental homeowners – and we’re on a mission to help the intermediary market get comfortable and confident advising on these underutilised products.”

Alexander Hall managing director Richard Merrett says:“Interest-only mortgages have been saddled by stigma since the financial crisis, and I can appreciate how the intermediary market approaches these products with great care.

“But today’s regulatory environment is materially different; lenders use much stricter criteria and brokers are required to demonstrate suitability as they advise their clients.

“It’s time to revisit the interest-only structure with a view to resolving the affordability challenges that so many aspiring homeowners face.

“Brokers don’t typically recommend interest only solely because the customer doesn’t want to pay capital off – it is more about structuring the monthly payment to fit their budget.

“This might be to suit an income structure, for example if they receive an annual bonus, or because they are deferring capital repayments while they spend money on the home or other immediate priorities.

“A good example is nursery fees. Many people buy a new home once they have a child and may have temporarily higher outgoings before their child starts school.

“Interest-only can be a great way to reduce monthly outgoings initially, ensuring payments remain comfortably manageable while allowing borrowers to prioritise capital repayment in the future.”