Perenna obtained an authorisation with restrictions banking licence to become a bond covered bank but is waiting for permission to provide mortgages. With the expectation that it will receive permission to issue loans, the lender plans to launch its mortgages in Q4 this year, with long-term fixes starting on 20-year terms.
The calculator uses information on a person’s income, expenses, property price and desired loan amount to determine how much they could borrow from Perenna.
This will not affect their credit score.
Perenna will not apply higher rates to stress test borrowers to determine their ability to afford a mortgage, as the lender will have no reversion rate. It will use the rate plus stress to assess this, which it said could allow people to borrow a larger loan.
The lender said having a long-term fixed rate would also give borrowers certainty and remove the worry of changing rates or not being able to access products when needed.
The lender will also look to change the adviser payment model so brokers can receive fees throughout the life of the mortgage as well as initial standard payments.
Perenna: A ‘catalyst’ for change
Colin Bell (pictured), chief operating officer and co-founder of Perenna, said: “Homeowners are now seeing that rates can go up, that remortgaging can be difficult and that taking short-term rates is risky. With a Perenna mortgage, which for the first time combines flexibility with long-term stability, homeowners can relax and not worry about their rate changing or having to remortgage at the wrong time.
“They can also change their mortgage if and when they want to, without an early repayment charge after five years. We know that increased affordability is important for first-time buyers trying to get onto the housing ladder. We can help with this by allowing many of those trying to buy their first home to borrow more on their income than some traditional lenders allow. This is because there is no need to stress about rates rising. Perenna will be the catalyst to solving a lot of the issues in the UK mortgage market and we look forward to launching soon.”
