Habito One will make it easier for some Britons to step onto the property ladder because they will be able to borrow more. Usually lenders offer to lend applicants four or five times their salary – depending on their circumstances. So who exactly will qualify for this new deal?
More than three quarters (78 percent) of Britons would love to be settled in their dream home by the time they’re 41, but for many it’s a pipe dream.
Now, for the first time in more than a decade, some Brits will be allowed to borrow up to seven times their basic salary.
This will make houses much more affordable to firefighters, police officers, nurses, paramedics and teachers.
But what about everyone else? Well, buyers will also be OK if one of them earns £75k or more.
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It’s perhaps no surprise that two thirds (66 percent) of homeowners welcomed the idea of more borrowing power, given the fact that property prices have soared over recent years.
As well as a requirement for working in a certain profession, higher-income earners who earn a minimum of £75,000 basic salary are also eligible no matter what industry they work in.
The catch is that the mortgage rate will be fixed for 15 years but this could be beneficial for some.
Daniel Hegarty, founder of Habito, said: “Longer, fixed-rate mortgages mean that customers are completely protected against any threat of fluctuating interest rates, in a way that shorter fixes of two or five years mortgage deals don’t allow for.”
Mr Hegarty continued: “As a lender that considers every applicant’s case individually, we’re confident that with suitable criteria in place, in the right circumstances, eligible customers can safely and securely boost their borrowing to buy the home that truly suits their needs and their life plans.”
He added that fixed-for-life mortgages are already popular in other parts of the world including in the USA and Europe.
“Our Habito One mortgage allows people to plan their lives, make their next move and pay off their mortgage, without punitive charges.
“We think this is particularly attractive in the rising interest rate environment we all now find ourselves in.”
It could be a viable option for those who don’t want to rely on The Bank of Mum and Dad or those who are likely to enjoy pay increases as they age.
There are no penalties for overpaying so it’s great for anyone who has the desire to become mortgage-free as early as possible.
Mr Hegarty added: “By extending Habito One’s affordability, buyers could be able to afford a better home than they otherwise would think.
We believe this will be particularly attractive to those who want to buy a home with lots of future potential, or for people who are expecting pay-rises over their careers, as Habito One enables them to choose to make unlimited overpayments to become mortgage-free sooner.”
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