Habito One mortgage - 7x salary

newdriver101

Anyone see this??!!
Only available to certain professions (eg NHS/professionals) or those who earn £75K+.
Minimum 15 year fix.
Long fix + high interest rates…
Reckon this might be most beneficial for Londoners or those whose rent is more than a mortgage but can’t get a mortgage due to salary multiples…

https://www.thisismoney.co.uk/money/mortgageshome/article-10342453/Home-buyers-borrow-7-TIMES-salary-Habito.html#comments

strawb_shortcake

I'm not eligible but had a quick look, if eligible I could borrow £266k and repay circa £1200 per month over 25 years. This would leave me with only £1k a month for other bills and living which I would not be comfortable with. 

As a long term strategy I can see the merits, but being a CS and our long term pay rises not looking particularly lucrative I'd have to make do with £1k a month for quite some time. 
 
On the other hand I'd be able to consider properties around the £500k mark rather than than the £350k that's far more realistic for us presently 

london21

15 years fixed, very terrible. What is the ERC? 15 years is a very long time for there to be change in circumstances.

Might end in tears and become unaffordable.

[Deleted User]

I agree, circumstances do change in the blink of an eye - if i were to look back on my last 15 years i'd never have dreamt certain things would happen to me !
ERC can be eyewatering.

James_D

newdriver101 said:

Anyone see this??!!
Only available to certain professions (eg NHS/professionals) or those who earn £75K+.
Minimum 15 year fix.
Long fix + high interest rates…
Reckon this might be most beneficial for Londoners or those whose rent is more than a mortgage but can’t get a mortgage due to salary multiples…

https://www.thisismoney.co.uk/money/mortgageshome/article-10342453/Home-buyers-borrow-7-TIMES-salary-Habito.html#comments

I wish that were true! Except that you need at least a 10% deposit, and to make the 7x multiple worthwhile, that could take quite a bit of time to save for. If you were to earn £75k that would mean a deposit of at least £52,500 without thinking about the stamp duty on top.

csgohan4

looks like a gimmick, you pay more, alot more in the long term

getmore4less

Had a look and this is not as bad as many might think.

https://www.habito.com/one

Unlimited overpayment, no ERC or exit fees(so they say)

The rate is dependant on the LTV and term.
Quite a bit higher than regular lending

As you improve your LTV you can change to the more favourable rate.

They also have a lower rate option with ERC(5% for 10y).

For those that can have an exit plan(income growth, overpayments etc) the exit to regular lending is not prohibitive(just the new borrowing costs). 

This could work quite well for those that are just locked out of regular mortgages by income multiples or stress testing.
they might only need 5x(and a bit) not the full 7x

Then a few years they can look at the mainstream or if rates have gone up a lot stay where they are.

K_S

Generally speaking, more choice in the mortgage market is good for borrowers. Personally, I think it's a great product, especially for the scenarios in the post above where you use this to get on the ladder and then remo to a more mainstream product in a few years. And I'll be willing to bet that underwriting will be super nit-picky so it's not like they're simply going to hand over 7x income loans to anyone that ticks the broad boxes mentioned in the ads.

With the upcoming relaxation in BoE stress tests for mortgage lenders (https://www.mortgageintroducer.com/boe-consult-withdrawing-affordability-test/), more of these high LTI products are likely to come to the market in 2022 so there should be better rates and more competition in the coming year.