Perenna brought out its affordability calculator in June last year so potential borrowers can find out how much they can borrow, before going on to launch its 40-year fixed rate mortgage product in November, with pricing beginning from 5.75 per cent and borrowers able to borrow up to six times their earnings.
Perenna opened to the wider broker market in January this year, having joined the lender panels of Mortgage Advice Bureau (MAB), Stonebridge and Legal and General Mortgage Club.
Speaking to this publication, Colin Bell (pictured), Perenna’s founder and chief operating officer (COO), said that the advantages of Perenna were flexibility and stability, pointing to the fact that mortgage brokers are in control of the move date as opposed to the lender.
He continued: “If you’re on a two- or five-year deal and you have to remortgage by a certain date, that could be the worst time, as people are finding right now.
“It could be good to move in five years, seven years, even in year four for example, the early repayment charge (ERC) is quite small as well as and financially it may be beneficial to move.
“The move date and the ability to change the mortgage rates rests in the control of the consumer, and the broker.”
“I think we consider this the complete mortgage product because it’s got affordability, stability, and flexibility all in one product. I think that’s why they need to look at us.”
Consumer Duty will assist long-term fixed rate popularity
Bell said that changing the mindset of the broker community from short-term products to long-term products would be aided by Consumer Duty.
He explained: “Under Consumer Duty, I think if you don’t show people long-term products alongside all the other products, you’re probably not doing justice to the consumer.
“In the past, this could be because the long-term product didn’t really exist or because it had bad ERCs. You didn’t have to show it, or you couldn’t show it. It didn’t exist, but now it does exist.”
Bell said that brokers should be showing long-term products as an option to “every customer” and then “make the choice based on their risk profile”.
“Consumer Duty is our friend and always has been our friend, and we designed our product around consumers, which is what Consumer Duty is all about anyway. It’s really important because if you didn’t demonstrate to the customer that there is a long-term stable product, it is not a good place to be sitting in three years’ time or two years,” he noted.
Bell said that there were a “lot of buyers” that were benefitting from Perenna’s approach, but first-time buyers were especially attracted given the increased challenges to get on to the property ladder.
“They [first-time buyers] find it very difficult to get on the property ladder initially and as we fix for the whole term so we don’t have to stress for interest rates, so in theory, a lot of people can get more money and buy the house early or the flat earlier or buy the one they really want what to buy without compromising,” he added.
He added that Perenna was also looking at other networks and larger firms, as well as “more specialist firms” who focus on first-time buyers, for instance.
Perenna’s no maximum age criteria proving attractive to brokers
Bell added that the Perenna’s no maximum age criteria were proving popular with brokers, as there are a lot of borrowers aged 50 or more who are remortgaging, but their term is constrained by their age by the big lenders.
“We had an inquiry for someone who was 72 and they were offered 30-year term but on a five-year fixed rate, but at 77 the market is even smaller, what are they going to do? Does that person want to live in the property for the rest of their lives potentially? What do they do when they hit 85?” he noted.
Bell said that, as first-time buyers were getting older – typically being in their 30s now – a 35-year term is taking them into 70.
“It’s educating the brokers in the community that we’re flexible. We’ve got the no max age, we can lend a little bit more to a lot of people and we have stability.”
Perenna recruitment underway to ‘build’ ability to ‘deliver at scale’
Perenna is recruiting business development managers (BDMs) to sit with national account managers as well for operations and underwriting.
“We’re recruiting now so that we build out our ability to deliver at scale. We’ve got good people and experts in all of the functional lines, and we have had that for a bit of time and now we need to build out those teams. We’re kind of recruiting across the board at the moment, we’re in a really lucky position that we get approached a lot.
“We’re not having problems recruiting people. I think a lot of people really like what we’re doing, they see the difference and they want to kind of come and join the club,” he added.
