Affordability is key

The 2023 mortgage market closes once again with affordability being one of its biggest challenges. This has been a consistent theme for many years irrespective of the economic backdrop or whatever else may be going on in the world.  

The mortgage trade press in December 2023 reports some notable headlines in relation to affordability including, ‘FTB sizing down to step onto property ladder’ and ‘Searches for marathon mortgages top 70% in 2023’. If anything calls for an alternative approach to affordability these headlines are it!  

At Perenna, our alternative approach means that we can and will get more borrowers who want to own a home and can afford it, onto the property ladder. 

Our funding model, which does not rely on retail deposits, is more akin to the tried and tested model across Europe and the USA, using long-term covered bonds as the mechanism. Given the long-term fixed nature of the proposition Perenna has no SVR or ‘revert’ rate (and therefore no SVR based stress test)! This means we can unlock higher LTIs for those who need it, whilst giving the flexibility of short ERC period (5 years). 

If you team this with the fact that ‘age is just a number’, it works for all consumers at any stage in their homebuying journey. At Perenna, we have no maximum age limits which would restrict term and therefore affordability, working in support of the current priories of the consumers mortgage requirements, whatever they may be.  

Certainty, stability, and no payment shocks complimented by 6 x income (subject to criteria of course) and our alternative approach to affordability means we can offer some of the, if not the ‘highest affordability’* in the market.  

Brokers remain at the forefront of what we do, and for this reason Perenna pay a ‘trail commission’ on our long-term fixed rates.   

And there’s more to come. At Perenna, we’re always looking for ways to help borrowers. So watch this space!   

Deborah Reeves, National Account Manager 

*Perenna launches “highest affordability” mortgage in the market to first-time buyers  | Perenna Brokers 

Correct at time of publishing.