Brand new 40 year fixed mortgages are about to enter the housing market – meaning home owners might never need to find a new deal again.
Broker Habito is set to shake things up with its new 10 year rates with plans for 40-year fixed deals to be available to first-time buyers, reports the Mirror.
People looking to remortgage or move house in England and Wales will also be able to secure the deal.
The “Habito One” mortgages will be available from March 15.
Products will be available to home owners with deposits as low as 10% – and Habito claims they will add 5% deposit deals to the range in early summer.
The company states that there will be no early repayment charges (ERCs) or exist fees for the entirety of the mortgages.
This means borrowers can lock into a particular rate giving them security over their payments and safeguarding against future interest rate rises while still being able to switch or move house.
Monthly payments will stay the same for the lifespan of the mortgage meaning you no longer have to re-mortgage every two to five years and can avoid fees attached to the process.
Daniel Hegarty, founder of Habito said: "The vast majority of us on a mortgage that's fixed for two to five years are effectively trapped in a system that doesn't fit our financial future or our home-buying habits.
"Worse still it demands that we continually switch to a new product before we get stung by a higher rate.
“This cycle is costly, time consuming and repetitive – roughly £1,000 each time up to 10 times over the length of the mortgage."
Habito claim that while the long-term mortgage model is new in the UK it is common in some other countries.
The deals come with a £1.995 product fee which customers pay when taking out a Habito One mortgage or increase their borrowing amount.
Rates start at 2.99% fixed rate for the full mortgage.
You can also get a deal at 2.99% for 15 years if you have a 40% deposit.
If you want to lock in for 40 years with a 40% deposit then rates are higher at 4.20%.
Borrowers with a 10% deposit can get a Habit One mortgage at 4.39% for up to 15 years or 5.35% for 40 years.
Like what you see? Then fill your boots…
Want to bring a little glamour to your life every day with all the most exciting real-life stories, fashion and even sex tips HOT off the press?
Well, we've got you covered with our great new Hot Topics newsletter – it'll drop straight into your inbox around 7pm and you can unsubscribe whenever you like.
And signing up now means you'll get a front row seat for our great new series inside the lives of the next generation of Daily Star Page 3 girls.
You can sign up here – you won't regret it…
Rachel Springall, a finance expert at Moneyfacts.co.uk, said there are more than 100 mortgage products on the market currently which last for a decade.
She said: “Most of the present deals out there tie in customers with early repayment charges for the duration of the deal, but there are some from TSB which will permit borrowers to exit after the first five years.”
But Springall added customers who choose the deal should not simply switch and sit tight.
She noted: "It's always wise for borrowers to review their mortgage as they could find a better rate elsewhere and depending on the deal, up-front costs to switch may not be too much to pay out on if the interest rate on the new mortgage is more competitive.
"At the moment, the average 10-year fixed mortgage rate is 2.84% and the lowest 10-year fixed deal comes from Barclays at 1.99% at 60% loan-to-value with a £999 fee.
"It will be interesting to see the uptake for these new mortgages and whether alternative lenders will launch longer-term mortgages in the current market to meet demand."
Source: Read Full Article