Habito launches longest-ever fixed-rate mortgage in the UK 

By Aisling Finn on Wednesday 10 March 2021

Alternative LendingSavings and Investment

Rates will be locked for anywhere between ten and 40 years with Habito’s latest mortgage offering.

Habito launches longest-ever fixed-rate mortgage in the UK 
Image source: Daniel Hegarty/Habito

Digital mortgage provider Habito has today launched the longest-ever fixed-rate mortgage in the UK.

The fintech has added ‘Habito One’ to its portfolio, a fixed-rate mortgage that promises no early repayment or exit fees for up to 40 years.

From today, first-time buyers, movers and remortgagers in England and Wales will be able to access the new mortgage with rates locked from anywhere between ten and 40 years. 

Daniel Hegarty, founder and CEO of Habito, told Altfi: “The power dynamic between the bank, the lender and the customer is changing. Whereas before you got what the bank gave you and nearly everybody was willing to go through some kind of contortions to get a mortgage.”

“With this new mortgage we’re offering, you never have to worry about Bank of England interest rates changing or your personal financial mobility changing. Normally, you would have to trade that off against flexibility so you might have to pay a pretty hefty fee but with Habito One, if anything changes in the macroeconomic climate or your personal finances, you are welcome to exit at any time.”

Research from Habito shows that nearly three quarters (73 per cent) of homeowners said they’d like to do more with their home finances in 2021, but half of them are unable to remortgage in the next six months as a result of being tied into their current agreements. 

Habito One mortgage rates start at 2.99 per cent and are fixed for the full contractual term of the mortgage.

A range of loan to value (LTV) options for homebuyers from 60 per cent LTV up to 90 per cent LTV will be available from today, with plans to roll out 95 per cent LTV mortgages later on this year.

While fixed-rate long-term mortgages are commonplace in countries like Denmark, France and the US, they are much rarer here in the UK.

“In the UK, because mortgage lenders are also retail banks and they're normally lending out your savings. And so, obviously, if you need to be able to get your savings back next week, that it doesn't work, those savings are locked in a mortgage,” Hegarty told AltFi.

“So we because obviously, we're not a deposit-taking bank, we're going and raising capital in capital markets. So, we're able to offer a really really quite different model. And transformational products like this one.”

In August 2020, Habito closed its £35m Series C funding round, which was put towards accelerating the digital mortgage provider’s growth and launch new products.

Earlier in the year, in March 2020, Habito teamed up with fellow fintech Moneybox. As part of the partnership, Moneybox would reward new Habito mortgage customers up to £600 deposited into a Moneybox account. 

To date, Habito has helped nearly 400,000 better understand their mortgage needs and submitted almost £6bn worth of mortgages. 

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