Perenna has raised £7.4 million as it aims to bring fixed–for–life mortgages to the UK market.
Following the investment, the London FinTech plans to obtain a banking licence as it moves towards offering flexible 30-year fixed-rate mortgages by 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.
Perenna is building a mortgage lender which will use long-term covered bonds to finance its products, taking inspiration from the Danish mortgage model.
It says customers will have the flexibility to port their mortgage should they want to move and offers early repayment charges that only cover the first five years of the product.
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 or take out a mortgage in later life. The company says it is investing heavily in building its proposition around technology to provide a better customer experience for UK borrowers.
CEO and co-founder Arjan Verbeek 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.”