Habito has launched a fixed rate mortgage with a term of up to 40 years.

Available from 60 per cent LTV to 90 per cent LTV, Habito One’ starts with a 10 year option and increments by five years up to 40 years.

Habito says that it plans to introduce a 95 per cent LTV option “later this year”.

At 60 per cent LTV for 10 to 15 years the rate is set at 2.99 per cent and at 90 per cent LTV, 4.39 per cent.

The rate for a 60 per cent LTV 40-year mortgage is 4.20 per cent and, at 90 per cent LTV, 5.35 per cent.

There is a £1,995 product fee in every case, paid at the start of the mortgage and if borrowers wish to increase their borrowing amount.

Additionally, there are no early redemption charges and borrowers will be able to port their mortgage any no extra cost.

When asked about loan-to-income ratios, Habito responded that the calculation would be “In line with Bank of England recommendations.”

Habito One will be available from 15 March.

Founder and chief executive Daniel Hegarty says: “The mortgages we have available to us today are remnants of a different age and a different power dynamic between customers and lenders.

“The future has never been less predictable and we need our homes to provide us with safety and financial security. 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. And while Habito provides free mortgage advice, some brokers still charge around £500 to advise on a remortgage, and that adds up over the lifetime of a mortgage.”

Reacting to the news, Legal & General Mortgage Club director Kevin Roberts says: “We should always welcome genuine innovation in the mortgage market and we welcome this initiative from Habito offering a fixed rate mortgage for as long as 40 years.

“Not only does the launch boost product choice for consumers, but long-term mortgages also have the potential to be a viable route for many buyers to help them achieve their housing ambitions.

“That said, borrowers have so far taken little interest in existing long-term fixed rate mortgages and it remains to be seen just how popular Habito’s new product will really be.

“Further information on Habito’s LTI limits for these mortgages for example will also help to determine exactly which borrowers could benefit from these solutions.”