Habito has today announced that it will launch the nation’s longest-ever fixed rate mortgage, which will come without early repayment charges or exit fees.
The “Habito One” will give buyers of all types access to long-term fixed rate periods starting at 10 years, going up to an unprecedented 40-year fixed rate term.
The firm said that opting for the new mortgage would allow buyers to “lock in” their rate while maintaining “complete flexibility and freedom over their home finances”.
It will be available on 15 March, Habito added. Rates start at 2.99 per cent and are fixed for the full contractual term of the mortgage.
Chief executive Daniel Hegarty said that current mortgage products – which generally offer fixed rates for two or five years – were relics of a “different age”.
“Our extensive research into long-term fixed rate mortgage tells us that homeowners value flexibility and certainty above all else”, he added.
“The current system is designed to offer neither. Our Habito One mortgage will allow people to plan their lives, make their next move, pay off their mortgage – all without punitive charges.”
The new mortgage comes shortly after Chancellor Rishi Sunak introduced a new government guarantee for 95 per cent mortgages in last week’s Budget.
He said that the product was designed to turn “generation rent” into “generation buy”.
The property industry welcomed Habito’s new product. Kevin Roberts, Director, Legal & General Mortgage Club, said:
“We should always welcome genuine innovation in the mortgage market and we welcome this initiative from Habito offering a fixed rate mortgage for as long as 40 years.
“Not only does the launch boost product choice for consumers, but long-term mortgages also have the potential to be a viable route for many buyers to help them achieve their housing ambitions.”
He added, however, that it remained to be seen how popular the product would be, given the general lack of interest in similar products buyers have shown so far.