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Unbelievable 40y mortgage


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Rules relaxed on who can take out a 40-year mortgage


Eligible borrowers can now borrow seven times their income, compared with the usual five times

ByRachel Mortimer26 December 2021 • 5:00am

Home buyers who fix their mortgage for four decades can now borrow seven times their salary, including those earning below average salaries. 

Habito, a lender, has relaxed its borrowing rules for customers who earn more than £25,000 when applying for its long-term fixed-rate loan, which allows buyers to fix for up to 40 years. 

However, to qualify for a mortgage worth seven times their income, borrowers must work in a profession specified by the lender, including a nurse, firefighter, teacher, barrister and architect. Buyers who do not match this criteria must earn a minimum of £75,000 to qualify. Rates start from 2.99pc without an early repayment charges, or 2.79pc with penalties. 

The Habito One mortgage launched earlier this year as the first of its kind and lending is usually capped at five times a borrower's income. 

Daniel Hegarty, of Habito, said: "We believe extending affordability 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."


If two borrowers apply for a joint mortgage and only one is eligible for seven times borrowing, the other's borrowing capacity will be capped at five times their income. If both buyers qualify, only the highest earner will be able to borrow seven times their salary. 

David Hollingworth, of mortgage broker L&C, said longer fixed mortgages allowed for more flexibility when it came to affordability. "Because the price is fixed for a long term it removes some if the worry about interest rates going up or down, so lenders can be more generous with their affordability testing. 

"Also, they have chosen careers with decent stability and likelihood of progression." All borrowers must have at least a 10pc deposit and self-employed borrowers are not eligible.

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