40 year fixed rate mortgage anyone?

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Just saw this in the guardian (also included link to FT article).

Apparently will be available via Habito next week for fixed rate periods between 10 and 40 years (FT article says England and Wales). 

According to table in the FT article no ERCs payable. 

https://www.theguardian.com/money/2021/mar/10/uk-40-year-fixed-rate-mortgage-habito-deposit-loan
https://www.ftadviser.com/mortgages/2021/03/10/habito-launches-40-year-fixed-rate-mortgage/

Comments

  • K_S
    K_S Posts: 6,748 Forumite
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    edited 10 March 2021 at 5:46PM
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    Interesting. I can see the attraction of a no-ERC long-term fix but the premium in rates is a bit too precious imho. Given how mobile UK's home-owner market is, will porting it be any less complicated than it is now? Time will tell.
    Anecdotally speaking, I think I've done two 10-year fixes in all my time broking and one of the clients was German. So not sure how much of a demand there will be. Having said that, product wise, it's most definitely an innovation in the market

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. 

    PLEASE DO NOT SEND PMs asking for one-to-one-advice, or representation.

  • lonibra
    lonibra Posts: 365 Forumite
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    Unless you have a crystal ball which says rates are going to 10%+ in the next 5-10 years, those rates are a joke. As a borrower I think they are launching to a small pool of customers. I am interested in knowing what brokers think of the demand for such products.
  • [Deleted User]
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    I do a lot of work with USAF and they are always bringing up how strange they find our system as 30yr fixed mortgages are normal to them. 

    Im sure it will be useful to some but in reality its probably a cheap way to generate column inches with a product that no one will end up taking. 
    Like when banks launched 0.99% mortgages.  No one took them as the fees were horrific but it drove the footfall to them
  • MSE_Helen_K
    MSE_Helen_K Posts: 159 MSE Staff
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    Thanks for starting a discussion on this topic - we've now published an MSE News story with more info...

    Read the full story:
    'Habito to launch 'lifetime' fixed-rate mortgage that lets you lock-in for up to 40 years - here's how it stacks up'

    If you haven’t already, join the forum to reply.
  • ACG
    ACG Posts: 23,767 Forumite
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    2.99% for a 10 year fixed rate with a 40% deposit - it does not make any sense. 
    You can get a 5 year fixed rate at more or less half the rate. IF interest rates double over the next 5 years, you would still be better off doing 2 separate 5 year fixed rates. 

    I read about this earlier today, admittedly I have no access to these deals (as far as I am aware), but I honestly can not think of a single customer I have seen in 10 years where any of these deals would make sense.  
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • zagubov
    zagubov Posts: 17,894 Forumite
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    They did used to exist. I knew somebody who took out a 25-year fix (at I think around 5%). Scotland probably in the 60s.
    It was a niche product back then but they wanted the certainty, probably found via a broker.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
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