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Habito launches buy-to-let mortgages: how do they compare?

Online broker offers first range of mortgages for individual landlords

Online mortgage broker Habito has launched a comprehensive range of buy-to-let mortgages, as it makes its first foray into lending.

The brokers offers a range of two and five-year loans for landlords, as well as more niche three, seven and 10-year fixed terms.

Here, we detail the range of new deals on offer from Habito, and assess how they stack up against the best rates on the market.


Online broker launches buy-to-let mortgages

Habito is an online mortgage broker, which uses algorithms to find the cheapest mortgage deals for its customers.

Now, it has turned lender, having partnered with an unnamed bank to launch a comprehensive range of Habito-branded buy-to-let mortgages.

For each of its fixed-rate mortgage terms, it will offer deals at four loan-to-value (LTV) levels: 65%, 70%, 75% and 80%.

Borrowers can either choose a lower-rate loan with a 1.5% application fee (for example, £3,000 on a £200,000 loan) or opt for a fee-free product with a significantly higher rate.

Habito will also be offering 2.5% cashback to its first 15 customers (up to a maximum of £5,000).

The deals will only be available directly from Habito, and won’t be listed with any intermediaries.

How do Habito’s two and five-year fixes compare?

Two and five-year fixed-rate mortgages are the most common deals in the buy-to-let market, so it makes sense to start here.

In the chart below, we’ve compared Habito’s fee-paying and fee-free deals with the cheapest equivalent products offered elsewhere.

As you can see, even Habito’s fee-paying rates aren’t particularly competitive, with many priced at least 1% more than the best rates from other lenders.

Would you get a three or seven-year mortgage?

The lender really comes into its own with its three, seven and 10-year fixed-rate deals, as such a comprehensive range simply doesn’t exist elsewhere.

Only a handful of three-year fixes are currently available at above 60% LTV, and there are currently no seven-year buy-to-let fixes on the market at all.

And only one lender, The Mortgage Works, offers 10-year buy-to-let fixes.

So while Habito isn’t winning the battle on rates, it’s certainly offering a wider variety of buy-to-let options than other lenders.

Habito’s rates on three, seven and 10-year deals

1.5% fee

LTV Three-year Seven-year 10-year
65% 2.69% 3.31% 3.51%
70% 2.84% 3.44% 3.64%
75% 2.94% 3.54% 3.74%
80% 3.69% 3.96% 4.16%


Fee-free

LTV Three-year Seven-year 10-year
65% 3.36% 3.61% 3.81%
70% 3.54% 3.74% 3.94%
75% 3.61% 3.84% 4.04%
80% 4.09% 4.27% 4.47%

It’s hard to compare these products with the competition, because there simply isn’t much out there.

Three-year products offer a viable alternative for landlords who might have been scared off from a five-year fix by high early repayment charges.

Seven-year fixes, meanwhile, provide an opportunity for investors looking for long-term rate security, some of whom may have been reluctant to commit to a 10-year deal.

Landlords are also sure to welcome the choice between paying an upfront fee or taking a fee-free deal with a higher interest rate.

Habito offers expanded pre-approvals

Habito says it has developed technology to replace ‘outdated’ agreements in principle with its own method, called Habito Instant Decision.

Under this system, your identity and a soft credit check will be carried out at the same time as the initial pre-approval of the loan. A hard credit check, which is recorded on your report for six years, is performed when the full application is submitted.

The broker claims that its approach cuts down on the waiting times associated with buy-to-let mortgages.

Can you get a Habito buy-to-let mortgage?

The range will initially only be available to individual landlords, though Habito says it will seek to introduce deals for company buy-to-let and portfolio landlords soon.

Habito’s current range is available to first-time and existing investors, as well as self-employed, retired and older landlords.

At 75% LTV and below, landlords won’t face any minimum income requirements, and will only need to show three months proof of income (two years if self-employed).

Habito says its initial funding of £500m of funding is expected to cover the first two to three years of lending.

Using Habito as a mortgage broker

In addition to its new mortgage range, Habito continues to offer an online brokerage service.

When you’re shopping around for a new loan, using a whole-of-market broker will show every deal available on the market and help you find one that suits your circumstances. But will Habito promote it’s own products ahead of better-priced competitors?

Habito told the Financial Times it would continue to act as a ‘whole-of-market, independent brokerage.’

A spokesperson said: ‘We give regulated advice so there’s no opportunity to recommend a product that’s not right for the consumer… As with all our recommendations you will always see our recommendation in the context of the five other options above and below it, and we explain why we’ve chosen to recommend it.’

  • Find out more: whether you’re new-to-buy to let or are an experienced landlord, you can find advice on mortgages, property management and insurance in our full buy-to-let guides.
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