In what is thought to be the longest fixed-rate deal ever offered, the online broker Habito has launched a range of mortgages for borrowers with deposits of at least 10% with repayments fixed for between 10 and 40 years. A start-up lender, Perenna, which is as yet unregulated, is expected to launch 30-year fixed deals later this year.

Such mortgages have long been hailed as the solution to affordability in the housing market. Prior to the 2008 fiancial crash, during his stint as chancellor, Gordon Brown commissioned a review that found they would stabilise house prices.

Before the 2019 election, the Conservatives suggested that longer fixed mortgages might help more first-time buyers into the market. However, few lenders have embraced the deals.

Building societies such as Nationwide offered a 15-year fixed rate before the crash but they have proved unpopular since as they normally come with high exit penalties, so borrowers often prefer a two or five-year deal.

Habito’s mortgages have no early repayment charges or exit fees, and Perenna will let borrowers remortgage after five years free of charge, The Times reports.

While 25-year mortgages were once commonplace, rising prices have caused many buyers to extend their terms to 30 and 40 years, leading them to become known as “marathon mortgages”.

Around half a million homeowners secured mortgages lasting more than 25 years in 2018. Of these, 11,000 took 40-year loans, according to a freedom of information request submitted to the Financial Conduct Authority by The Times.

Long-term fixed-rate deals are riskier for lenders because the cost of borrowing could increase over the lifetime of the product if the Bank of England raised base rate, now at an all-time low of 0.10%. Lenders factor this in by making long-term fixed products more expensive than shorter deals.

While commonplace in countries including Germany and Denmark, long-term fixed mortgages are still rare in the UK but are begining to become more popular. In 2019, Virgin Money launched the first 15-year deal since 2008. Barclays launched a 10-year deal at 1.99% last year for borrowers with at least a 40% deposit.

Habito’s range, available from next Monday, offers the longest fixed-rate term on the market. Depending on the loan-to-value and the term, the interest rate is between 2.99 and 5.35% and there is a £1,995 product fee.

Deals with small deposits are popular with first-time buyers but tend to have high interest rates, so more opt for short-term deals. The average rate for a two-year fixed deal with a 10 per cent deposit is 3.52% . This increases to 3.66% for a five-year fix.

Chris Sykes, from the mortgage broker Private Finance, said Habito’s rates looked high when compared with five-year fixed deals. He said: “The security of long-term interest rates will be attractive to some, but they might be kicking themselves if interest rates remain low.”

Daniel Hegarty, chief executive of Habito, added: “If the most important thing is the cheapest deal, it’s likely that a two-year fix will be the right product. But from our experience, that’s not what drives consumers.”