Mortgage broker Habito has announced that it will be offering borrowers a fixed-rate loan that comes with a period of repayment lasting for a maximum of 40 years.
This product is being called Habito One, and borrowers will have the option of choosing from a number of different repayment terms. These will range from the shortest available term of 10 years and will go up to 40 years, increasing in five-year steps. The mortgage is set to be available with loan-to-value (LTV) levels of between 60% and 90%, although Habito is already indicating that a choice of 95% LTV will be added at some point during the year.
Those who opt for the 60% LTV version and a repayment term that lasts for 40 years will find that the rate is 4.20%, with this increasing to 5.35% for loans at 90% LTV. The fee remains the same at £1,995, regardless of which variant of the mortgage product the borrower picks, with this being paid at the beginning of their mortgage term.
Speaking to Mortgage Strategy, Director of Legal & General Mortgage Club Kevin Roberts stated that truly innovative products were always to be welcomed, adding:
“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.”
This is also great news for advisors with CeMAP training, as the 40-year repayment term will appeal to many borrowers who feel other products are out of their reach.