Habito ... Clever Marketing or just a Scam?

Calling out Habito on their 7 x salary mortgage – clever marketing or just a scam

Yes you heard right a mortgage available to you based on 7 times income.

So there you go simply as that… but wait maybe its not that simple.

Shock horror you are right.

Why does this seem so shocking.

The reason being the average lending power is between 4.5 and 5 times salary with mainstream lending.

It is achievable but comes with some very strict criteria

Here is some of the insights:

Starts at 10% deposit

Rates between 4.44% and 6.29%

You’ll need to earn at least £25,000 if you work in any of these jobs: firefighter, nurse, paramedic, doctor, police, accountant, barrister, teacher, engineer, lawyer, dentist, architect, surveyor or vet. 

There is an extensive list available

Fees are in excess of £2000

This is a quote from thoer website..

Too many people are priced out of buying a home.

House prices have risen a whopping 29 times more than wages have in the last 50 years. In London, the average price of a home is now almost 11 times the average wage. This has left too many people priced out of buying the home they want.

Our answer: let people borrow more, and close that gap between wages and house prices. Then fix their monthly mortgage payments forever, so they have certainty and security about what they’re paying until they’re mortgage-free.

Call me a sceptic but lets run the figures

• Steve earns £30,000 which after pension of 5% nets - £1905 per month
• This lender will offer him 7 times £30,000 - £210,000
• At a 10% deposit and a purchase price of £233,333
• Over a 25 year term he will be paying an interest rate of 5.84% repayment

£1,348 per month

Leaving him £557 per month for everything else…

Lets take some standard costs for a homebuyer

Lets take average gas and electric, council tax and water

• Gas & Electric - £164 per month (https://www.nimblefins.co.uk/average-cost-gas-electricity-bill-uk-household)
• Water - £30
• Council tax - £150
• Tv licence - £13.25
• Broadband - £30
• Mobile phone contract - £30
• Travel costs - £50

That leaves Steve with £89.75 for the month

Poor Steve is going to have to live off value beans, sell his car, and never see his friends again. He also needs to hope nothing breaks in the house.

Unless these underwriters don’t care about affordability or buyers welfare there is going to be very few who will qualify and in my eyes this is just a sly sales ploy by Habito to funnel people into their mortgage broker arm for advice.

But they are B corp certified so that makes it all fine

Clever or unethical marketing you decide… I know my thoughts