HOUSEHUNTERS can borrow up to seven times their salary with a new mortgage deal.

Buyers need to consider the eligibility criteria and whether it's the best option for them – here's everything you need to know about the mortgage deal.

The Habito One mortgage product was launched in 2020, but the eligibility criteria have changed to open it up to lower earners and key workers.

Now some people on salaries of £25,000 or more can borrow up to 7 times their earnings with the lender.

Most mortgage firms will only lend consumers around 4 to 4.5 times their annual salary.

The new product is designed to make it easier for lower earners to get on the housing ladder.

But experts have warned buyers to be cautious before applying, because the deal could lock you in to higher payments.

Here's everything you need to know about the Habito One mortgage.

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It's a long-term fixed-rate mortgage

A long-term fixed-rate mortgage means the interest rate will stay the same for a long period of time.

With the Habito One mortgage, this is between 15 to 40 years.

That means your monthly payments will be stable, and you won't be affected by changes to terms or rates.

But this means you'll be paying more right now – and if interest rates fall, you'll be stuck with the higher amount.

Before you take out a fixed rate mortgage, or any kind of loan, you should think carefully about whether you'll be able to make the payments.

Banks and lenders carry out their own affordability checks before agreeing to lend you money, but you should consider whether your financial situation could change.

Karen Noye, mortgage expert at Quilter, said: “While these products will provide the potential for people in certain occupations on lower salaries to borrow more, it does not come without risks.

"First of all is the fact that the ability to borrow more will come at a cost of higher monthly repayments and higher interest rates compared to standard mortgage deals. Meeting these repayments could become a challenge if circumstances change."

She added: "We don’t know where rates will be at the end of 2022, let alone at the end of the decade.

"There are no early repayment charges, but those that have borrowed seven times their income will be very limited in terms of remortgaging options elsewhere unless their financial situation has changed somewhat since taking the mortgage."

You have to earn a certain amount – but less in some jobs

Unless you earn over £75,000 a year, you need to be in one of the following professions in order to qualify for the mortgage.

You'll still need an annual salary of at least £25,000 in order to be considered.

These are the jobs that qualify:

• Police – Senior police officers, police officers (sergeant and below), police community support officers
• Firefighters
• Nurses
• Paramedics
• Doctors
• Chartered and certified accountants
• Barristers
• Teachers
• Civil engineers
• Solicitors and lawyers
• Dentists
• Architects
• Surveyors
• Vets

All professional applicants must be qualified, practising and registered with the appropriate industry body.

One year employment history

Applicants need to have been employed for a year in order to be accepted.

Usually, mortgage providers only require three to six months proof of employment.

Habito has extended this as part of its checks to make sure borrowers have a stable income and will be able to afford their repayments.

Only one applicant per couple is eligible

If you're hoping to buy a house with your partner, you will only be able to borrow 7 times one person's salary.

The other half of the couple will be able to borrow up to five times their salary – so take that into account when you're making plans.

You still need a deposit

Buyers will need to save up for a deposit before they can buy a house.

Habito says you need to provide a 10% deposit, and they will lend the rest up to 7 times of your salary – if you're eligible.

The maximum loan they will pay out is £1.5million.

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