In the UK, there aren’t many longer-term fixed rates out there. We’re changing that with the Perenna mortgage.

Like with anything new, we know it can take time to feel comfortable with a new offering. We appreciate that not everyone fully understands how long-term fixed rates can benefit them. So, we think it’s time to shine a light on some of the myths we’ve come across and show how Perenna’s innovative product can address these for your customers.  Here are just some of the comments we’ve come across…

Myth: They’re not flexible

We say:

Typically, longer term fixed rates offered in the UK have not given borrowers the flexibility they may want. Ten-year fixed rates may come with long early repayment charges which can restrict borrowers.

However, a Perenna mortgage is different. Our product combines long term stability with flexibility. Your customer will know exactly what they must pay each month for the whole mortgage term. No teaser rates, no rising payments, no shocks.

Plus, our mortgages are designed to fit around their life. That’s why they can take their mortgage with them when they move home or change mortgage to another lender or product without charge, after 5 years.

Myth: Not many people are interested

We say:

Thousands of people on our waitlist have shown that they are interested. Plus, millions of people across US and Europe already benefit from products like this. So, why shouldn’t these mortgages work in the UK? Our mortgages have been designed to help:

• first-time buyers looking to borrow a little bit more
• homeowners seeking stability when remortgaging
• later life borrowers wanting to release equity from their property

Myth: They’re expensive

We say:

You can’t compare apples and oranges.

Whilst a Perenna mortgage may have a higher rate than some other ‘teaser’ rates on offer, you need to think about how they may compare longer term. For example, if your customer is  thinking about fixing their rate over a short term, they’ll need to consider what happens when that deal comes to an end. Will they be able to afford a new mortgage if rates rise or their circumstances change? We want to remove this risk.

We don’t think homeowners should have to worry about rates changing or being denied access to mortgage products in the future. That’s where a Perenna mortgage comes in. By fixing their rate for the full mortgage term, they’ll know exactly what they must pay each month for the whole mortgage. Can you put a price on peace of mind?

Myth: Rates will come down so no need to fix for longer

We say:

Everyone loves a good deal. But is it wise to hazard a guess on what could be your biggest financial decision? Instead of trying to predict the future, your customer will know exactly what they’ll pay each month with a Perenna mortgage. This puts them back in control of their finances so that they can plan for their future.

Yes, rates could come down, or their circumstances could change. And that’s why our product comes with flexibility as standard. If they want to change, that’s no problem. They can do so without charge after 5 years.

Find out more about our mortgages?

Want to find out if Perenna could help your customers? Why not use our calculator to find out how much they could borrow? Or get in touch with the team to find out more.

Correct at time of publishing.

Growing older is part of life.  And often, with age, financial security becomes more important than ever.

For many of us, owning a home is a huge part of that security. And for most people, that means getting a mortgage.

However, as retirement approaches, homeowners in the UK may find themselves in a tricky situation if they want access to a mortgage. Often the options on offer to them are limited.

You may have experienced customers who aren’t able to shop around or get a mortgage at all, simply due to their age.  Retirement should be a time to relax and enjoy life away from the pressures of the daily grind. And yet, many may find people themselves worrying about their home.

So why can having a mortgage in later life be important?

There are many reasons why people want a mortgage into retirement. It could be to support their lifestyle or to pay for home improvements. Or for some, it’s simply to allow them to stay in the home they love.

Here are a few examples to bring this to life.

Example 2

John and Beth want to pay down their debt as soon as possible.

John, 54, and Beth, 52 are on an interest only mortgage, with no repayment plan. Their joint income is £80k.

They don’t want to downsize as they love their property and location. They are looking at a capital & interest repayment product. They would like to keep their monthly payments low.

Example 3

Melanie has recently separated from her partner and needs a mortgage that helps her meet affordability requirements.

Melanie is 56. She is a nurse with an income of £45k.

Her priority is to remove her partner from the mortgage and avoid having to sell the family home and downsize.

As the mortgage will rely on her income alone, affordability as well as end of term age limits are stumbling blocks for her.

How can Perenna help?

Here at Perenna, we want to help homeowners make the most of their retirement. And for us, age is just a number. That’s why we’ve removed age limits. Instead, we assess mortgage applications on property value and whether the monthly payments are affordable (maximum loan to value limits may apply). This could make a huge difference for each of the examples above. It could be the difference between your customer achieving their goals and not.

Want to find out if Perenna could help your customers? Why not use our calculator to find out how much they could borrow? Or get in touch with the team to find out more.

Correct at time of publishing.

We have announced an exclusive partnership with L&C Mortgages as we begin lending.

We received our full banking licence from the PRA and FCA at the start of September.

Perenna mortgages are fixed for the full term of the loan (20-30 years), and only carry early repayment charges for the first five years. This gives customers certainty that their payments will never increase, as well as allowing them to take advantage of lower rates that may be available in the future, and change when the time is right for them.

Initially we will make their mortgages available to homeowners on our waiting list who are looking to remortgage, and have partnered with L&C for this exclusive launch. L&C will also make Perenna’s mortgage products available to other L&C customers looking to remortgage.

After this initial phase, we will launch into the wider UK mortgage market with a panel of distribution partners around the UK, as they look to create a nation of happy homeowners.

Head of Product, Proposition, & Distribution, John Davison, said: “We are launching a new kind of mortgage, offering true long-term security, and flexibility, for homeowners.  L&C has substantial experience of working with new lenders and we are excited to be working with them exclusively during this phase. Customers will still get the same great service from L&C as well as dedicated support from the team at Perenna.”

Alan Young, CEO at L&C, said “We’re always keen to help bring new lenders and innovative solutions to market and are delighted to be partnering with Perenna, to launch their long-term fixed rate proposition.  Borrowers are acutely aware of how volatile the mortgage market can be following the recent hikes in interest rates. Perenna’s offer of long-term security with only a 5-year tie in period brings a brand new approach to the fixed rate options in the market and will only strengthen the range of solutions for our customers.”

Correct at time of publishing.

Growing older… the one thing we cannot stop

People are living longer, working longer and retiring later. This is a trend that has been gathering pace over recent years, but (dare I say it), the mortgage market has not kept up!

If you think about a typical 1930’s house, it is very compartmentalised. There is a separate kitchen, dining room and living space. Fit for purpose perhaps, but nevertheless has fallen out of favour.  In recent times, we have seen a switch to more open plan arrangements where you can be together whilst cooking, eating and doing homework. In short, the structure of our houses has moved with our lifestyles.

Could the same be said about our later life mortgage market? It works, but perhaps it’s time for an upgrade? Maybe now is the time to bring the market in line with how we want to live?

There was lots of talk in the industry from 2010 onwards about later life lending which in turn lead to RIOs (retirement interest only mortgages). The idea was that RIOs would assist and give greater choice to the consumer – and to a degree this worked… A move from costly equity release (which was perhaps the only option via a Lifetime mortgage) to interest only, which instead protected equity and inheritance for families.

But does this do enough? Is more innovation needed?

Some could argue that not all people want interest only and this in itself is a more expensive option compared to a repayment mortgage where the capital (not just interest) is being reduced.

Repayment (which may be preferred if available) is usually the better option, however, it comes with lender concerns over long term affordability. Especially with lenders stress testing, looking at maximum age & proof of income in a market where relatively short- term fixed rate products are the only option on offer.

A further change is needed. If we think about that 1930s house, it feels like there’s more work to be done, before it’s quite right for 2023 living.

So what’s the answer?

Perhaps a long-term fixed rate repayment mortgage, without reversion, would do the job.

A longer-term product where the monthly payment does not change for the life of the loan, providing stability and certainty.

And that’s where Perenna comes in. Perenna mortgages are financed through long term covered bonds rather than retail deposits. This allows Perenna to offer a longer-term option to borrowers. It means there’s now an option where homeowners needn’t worry about rates changing or being denied access to products as they approach retirement. The short ERC of 5 years provides flexibility too.

Why shouldn’t it be feasible to use a pension for monthly mortgage payments? This should be an individual choice. Surely a happy retirement means financial freedom and choice? Longer term options should not be out of reach where suitable for the individual. And with no age limits, Perenna’s approach supports this. It’s that extra step towards the open plan arrangements of the modern-day house!

This style of lending on a longer term fixed could certainly be used as an option to exit RIO/TIO. And thinking about cost, a longer term alternative should be more cost efficient than the current options of rolled up interest, or monthly interest only.

There is definitely a gap in the market and  it feels like there’s a need for more activity and competition in this space. After all, variety is the spice of life!

So, with consumer duty seeking better outcomes for borrowers, an alternative option in the later life lending space could certainly be something for consideration.  We’re keen to have that discussion with you, so why not get in touch. 

Correct at time of publishing.