It will lend up to 95% LTV and up to six times the borrowers' income
Digital mortgage lender Perenna has launched its long-term high loan-to-value (LTV) fixed rate product to new purchase customers and first-time buyers, within its pilot with L&C Mortgages.
Perenna will lend up to 95% LTV and for fixed rate terms up to 40 years, supporting borrowers with lower monthly payments. It will also lend up to six times a borrowers’ income, subject to criteria, to assist first-time buyers who consistently struggle with affordability.
The new product also carries declining early repayment charges (ERCs) for the first five years only.
Perenna first announced its plans to offer long-term fixed rate mortgages when it received its banking licence from the Prudential Regulation Authority and Financial Conduct Authority last year.
Colin Bell, chief operating officer and co-founder of Perenna, noted that while mortgage products with rates that are fixed for 30 years or more are less common in the UK, there are countries, such as the US and Germany, where long-term fixes are the dominant product.
“We’re really excited to open up the Perenna Mortgage to first-time buyers and new purchase customers,” Bell said.
“First-time 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 (pictured), chief executive and co-founder of Perenna, added that with its full unrestricted UK banking license and recent funding round, it is now ready to deliver the much-needed changes in the UK mortgage market, including the introduction of long term fixed rate mortgage products to the country.
“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,” Verbeek stressed. “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.”
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