Mortgage lender Perenna has become the first UK startup to receive an unrestricted banking licence in 2023.
Perenna secured a restricted banking licence last year and raised a £25 million Series A from Silverstripe IAG.
Full FCA and PRA approval will enable the firm to introduce its long-term fixed rate mortgage products to the UK, a market typically dominated by variable and short-term fixed rate packages.
Perenna’s flagship product will shield customers from rising interest rates by providing certainty in their mortgage rate for 20 or 30 years with an Early Repayment Charge (ERC) period of just five years.
Perenna’s 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.
Initially, Perenna will offer its mortgages to people on its waitlist, and then the wider public later this year.
Arjan Verbeek, CEO & co-founder, Perenna, previously managed the securitisation and covered bond structuring team within the Financial Institutions Solutions business at BNP Paribas.
“In other countries, billions of pounds of pension savings are channelled into the real economy using covered bonds," he says. "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.”