Perenna has taken inspiration from the Danish mortgage model to harness an innovative approach which will enable it to issue 30-year fixed rate mortgages at ‘highly competitive rates’.

It said it would also give customers the flexibility to port their mortgage should they want to move and would offer early repayment charges which only covered the first five years of the product.

Perenna announced today it was applying for a banking licence from the PRA and FCA and had completed its latest funding round, raising $10 million as part of its plans to obtain a banking licence and bring its technology-centric lending proposition of fixed for life mortgages to the UK housing market in summer 2021.

The latest investment in Perenna has been raised from a group of investors including former Deutsche Bank Head of Structured Product Syndicate and MD Kevin Flaherty, Capdesk founder Casper Arboll, Star Capital managing partner Tony Mallin MBE, and other notable city investors and family offices.

Product range

Perenna’s products will be available to borrowers ranging from first-time buyers, who can take out a mortgage with as little as a 5% deposit, to those who want to move, remortgage or take out a mortgage in later life.

The company is investing heavily in building its proposition around technology to provide a better customer experience for UK borrowers and introducers.

Britain’s mortgage market currently has around £1.5 trillion in outstanding loans. Perenna believes that its radically different approach to mortgage lending could help many first-time buyers onto the housing ladder and release equity from existing homeowners.

It thinks this could increase the UK mortgage market by around £500 billion over the next five years, fixing the broken housing market and boost GDP.

Colin Bell, COO and co-founder of Perenna said: “Our latest round of funding brings us another step closer to offering fixed for life mortgages to the UK market. Long-term, fixed rate mortgages have the power to help many of the currently underserved demographics in the UK, such as first-time buyers and those in later life.

“By increasing the numbers of people able to secure mortgage finance, we will help boost business volumes for intermediary partners who will play an essential role in helping to promote and educate the benefits of fixed for life mortgages to those who have found the current market model time consuming and costly.

“We want to create a mortgage experience for customers and introducers that puts them at the centre.  Mortgages should be easy to apply for, quick to attain and delivered with certainty and that is what we are aiming to do.”

Arjan Verbeek, CEO and co-founder of Perenna said: “For too long real and meaningful innovation in the UK mortgage market has been limited. This hasn’t just left Britain with a sector that has poor product offerings for customers. In some cases, borrowers have been excluded from the housing market altogether, from first-time buyers struggling to meet affordability criteria, to older homeowners who want to borrow but are restricted simply because of their age.

“This latest investment is a powerful vote of confidence from a high quality investor consortium in Perenna’s proposition. It puts us on target to launch our innovative range of long-term fixed-rate products, which we really believe could transform the UK mortgage market for consumers, allowing them to borrow what they can actually afford and creating a nation of happy homeowners.”