Mortgage lender Perenna has made history by becoming the first UK startup to receive an unrestricted banking licence in 2023.
Last year, Perenna obtained a restricted banking licence and successfully raised £25 million in a Series A funding round led by Silverstripe IAG. With full FCA and PRA approval, the firm is set to launch its long-term fixed-rate mortgage products in a UK market typically dominated by variable and short-term fixed-rate offerings.
Perenna’s flagship mortgage product aims to protect customers from rising interest rates by guaranteeing their mortgage rate for 20 or 30 years, with an Early Repayment Charge (ERC) period of just five years. The innovation behind Perenna’s proposition is its funding model, which involves issuing covered bonds to investors seeking long-term stable income, such as pension funds and insurance companies.
Initially, Perenna will offer its mortgages to individuals on its waitlist, expanding access to the broader public later this year.
Arjan Verbeek, CEO and co-founder of Perenna, previously led the securitisation and covered bond structuring team at BNP Paribas. He noted, “In other countries, billions of pounds of pension savings are channelled into the real economy using covered bonds. Our unique funding model, combined with our banking licence, will allow us to achieve the same in the UK and help unlock the housing market, which is a crucial component of GDP.”