New specialist lender Perenna will offer long-term fixed mortgages after securing its banking licence from the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA).

Perenna, the first UK start-up to secure an unrestricted bank licence in 2023, will offer 20- or 30-year mortgages and an Early Repayment Charge (ERC) period of five years.

The bank’s unique proposition is created by a funding model which relies on issuing covered bonds to investors seeking long-term stable income, such as pension funds and insurance companies.

Perenna says securing the bank licence will enable them to develop a range of products aimed at first-time buyers, second steppers and later life homeowners.

Initially, Perenna will offer its mortgages to people on its waitlist, before rolling out the products to the wider public later this year.

Perenna chief executive and co-founder Arjan Verbeek says: “We’re introducing much needed structural change to the UK.

“In other countries, billions of pounds of pension savings are channelled into the real economy using covered bonds.

“Together, our unique funding model and banking licence will enable us to do exactly the same in the UK and unlock the housing market, an important part of GDP.”

Perenna chief operating officer and co-founder Colin Bell adds: “Our mission is to create a nation of happy homeowners.

“We’re excited to offer our flexible products to consumers who, for too long, have been left underserved.

“We want people to get on with their life and not worry about their mortgage product.”