Perenna launches “highest affordability” 1 mortgage in the market to first-time buyers 

We have officially opened up our flexible long-term fixed rate product to new purchase customers and first-time buyers, within our pilot with L&C Mortgages.  

We will lend up to 95% LTV, with fixed-rate terms up to 40 years, helping borrowers lower their monthly payment amount. We will also lend up to six times a borrowers’ income, subject to criteria, which could act as a significant lending boost for many first-time buyers who consistently struggle with affordability.  

A longer fixed rate term allows borrowers a higher affordability boost compared to those on a short-term fixed rate mortgage. This is because of the way current mortgage products are designed which place all the market risk on borrowers. Once this is removed, through fixing the rate for the entire term, first time buyers could borrow more. This is the innovation we offer. 

For example, on a £60k joint income, a first-time buyer could borrow up to £355k with us, which is about £70k more than the closest high street lender.2

This could make a massive difference for first time buyers. As a result, borrowers looking to maximise their borrowing responsibly should consider a longer-term fix compared to a shorter-term fix like a 2 year or 5-year fixed rate mortgage.  

 The product also only carries declining early repayment charges (ERCs) for the first five years, making it highly flexible. This gives borrowers certainty that their payments will never increase, as well as allowing them to change when the time is right for them. 

Colin Bell, COO & Co-Founder of Perenna comments:  

“We’re really excited to open up the Perenna Mortgage to first time buyers and new purchase customers. First rime buyers are constantly struggling to get onto the housing ladder due to affordability issues – whether that’s saving up enough for a small deposit or being able to borrow enough to afford a home they really want. The Perenna Mortgage is the complete mortgage product – increased affordability combined with long-term stability and flexibility.” 

Arjan Verbeek, CEO & Co-Founder of Perenna comments: 

“We believe in unlocking the power of homeownership without having to sacrifice the amount you can borrow – borrowers should be able to have both their cake and eat it. As we remove market risk from borrowers, customers can borrow what they actually can afford, which in some cases can be on average up to 30% higher than the high street lenders.3 With our full unrestricted UK banking license and recent funding round, we are ready to deliver the much-needed changes in the UK mortgage market, and start delivering better outcomes for homeowners across the country.” 

Notes:

• Footnote 1 – “Highest affordability” defined as highest borrowing amount by use of intermediary mortgage affordability calculators across leading high street lenders2, as at 13 November 2023 
• Footnote 2 – “Leading high street lenders” defined as those who control 75% of the market by gross lending during 2022 – MM10, UK Finance (as at 13 July 2023) 
• Footnote 2 – “Leading high street lenders” defined as – HSBC, Natwest, Nationwide, Santander, Virgin Money, Lloyds Banking Group, Barclays 
• Footnote 3 – Data chart, see below, as at 13 November 2023:

All applications subject to full underwriting and credit assessment

Correct at time of publishing.

We are delighted to announce our recent partnerships with Mortgage Advice Bureau and Stonebridge as we prepare our broker panel for launch at the start of 2024. We received our full banking licence from the PRA and FCA at the start of September and began an exclusive pilot phase with L&C Mortgages this autumn.

The Perenna mortgage fixes the interest rate for the full term of the loan. By removing interest rate risk, borrowers could receive an affordability boost compared to those applying for a 2-year or 5-year fixed rate mortgage. We will offer up to 95% LTV, up to 6 times borrower’s income, and no age caps subject to criteria. And with early repayment charges for only five years, customers are given the best of both worlds – certainty and flexibility.

This provides a fantastic option for borrowers, whether they are first-time buyers, home movers, looking to remortgage or borrow in retirement.

As we progress, we will continue to add distribution partners around the UK as we look to create a nation of happy homeowners.

Head of Product, Proposition, & Distribution, John Davison, said: “Perenna offer a new kind of mortgage, giving homeowners improved affordability, true long-term security, and flexibility. Our product ensures they never have to pay to remortgage again and protects them from experiencing the rate shocks we’re seeing in the market right now. Stonebridge and Mortgage Advice Bureau are the perfect partners for us to launch with, offering nationwide coverage and a high-quality service to customers.”

Danny Belton, Head of Lending at Mortgage Advice Bureau, said: “We’re excited to collaborate with a new lender who will bring fresh perspectives, cutting-edge products, and criteria that has been proven to perform well in an international market. The Perenna proposition will be well suited to customers who are looking for long-term fixed products.”

Jo Carrasco, Business Partnerships Director at Stonebridge, said: “We are extremely excited to be in a partnership with Perenna, and believe their innovative products and ambition to change the shape of the market will be well received by our Appointed Representative firms.”

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Correct at time of publishing.