Online mortgage broker Habito has announced it is to move into the mortgage lending market with a range of buy-to-let products.
After raising £500m from an institutional backer, Habito today (July 9) launched a range of buy-to-let mortgages — from two-year fixes to 10-year fixes — on its new mortgage platform.
According to Habito, the platform will provide the "fastest mortgage process in the country" using its own technology and replacing traditional ‘decisions in principles’ with ‘Habito instant decisions’.
According to Habito, its instant decision includes comprehensive affordability and credit checks, eligibility checks, automated property valuations and identity checks so the consumer gets a decisive ‘yes’ or ‘no’ on the spot.
The mortgages are available at two-year, three-year, five-year, seven-year and 10-year fixed rates and at 65 per cent, 70 per cent, 75 per cent and 80 per cent loan-to-value.
The rates range from 2.59 per cent for the two-year fix with a 35 per cent deposit to 4.47 per cent for a 10-year fix at 80 per cent LTV.
The range is open to all, including first-time buyers, self-employed workers, and retired landlords, and there are no DSS exclusions.
Habito’s range has no minimum value or maximum LTV restrictions for ex-local authority flats and no minimum income for first-time landlords up to 75 per cent LTV.
However, the range will only be available through the Habito broker service, meaning no other advice or intermediary service will have access to the new buy-to-let range.
Habito’s brokerage will continue to operate as a separate business line to provide online advice on whole-of-market mortgages.
The online broker stated it would look to move into the company buy-to-let and portfolio market as well as residential mortgages within a year.
Daniel Hegarty, founder and chief executive of Habito, said: "Habito exists to connect customers with the best possible mortgage products.
"For the past three years, we’ve invested heavily in our best-in-class brokerage to dramatically improve and evolve the process of getting a mortgage. Now we’re rolling up our sleeves to tackle the mortgages themselves.
"By applying our tech-first, people-centric principles, we’ve created a suite of mortgage products that speaks to one of the most under-served groups of borrowers: landlords."
Mr Hegarty went on to say that for buy-to-let landlords, "hell means long waits, inflexible criteria and decision uncertainty" and that Habito’s new range tackled these issues.
He added: "We’re proud to bring to market a range of products that have been built with landlords in mind: long-term fixed rates, competitive pricing, low deposits and sympathetic to self-employed and older customers.
"We guarantee certainty and speed to offer. It’s the next generation of mortgages."
The online broker hopes its range of products for landlords — which have been "designed with the customer front and centre" — will help the industry following a range of setbacks in the market.
Landlords have been subject to a number of regulatory and tax changes in recent years, with the introduction of an additional 3 per cent stamp duty surcharge on second homes in April 2016, which was closely followed by cuts to mortgage interest tax relief.
Buy-to-let borrowers are also now subject to more stringent affordability testing under the Prudential Regulation Authority's tightened underwriting rules.
In addition the government has proposed abolishing the so-called ‘no fault’ section 21 notices, which give landlords the power to evict tenants at the end of their tenancy without a reason.
Habito stated its landlord research had shown the industry was calling for "more clarity, speed, fairness, ease and innovation" after such changes, which it hopes to fulfil with its ‘Habito instant decision’.
A traditional mortgage ‘decision in principle’ is a promise from a lender that it will lend a certain amount to a consumer before they've finalised the purchase of their home and is made after basic affordability and credit checks.
Habito launched its robo-adviser back in September 2016 to "plug the advice gap" and has since raised millions of pounds to invest in mortgage platform technology and expand its reach into retail banks.
imogen.tew@ft.com
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