Perenna has unveiled a new Standard Variable Rate (SVR) comparison calculator to showcase the impact of stressed rate affordability assessments applied on traditional short-term fixed rate products.

The calculator allows brokers to calculate the approximate loan size that Perenna would be able to offer a client, subject to criteria, and then compares this against traditional SVR stressed mortgages.

Without needing to stress test loans against an SVR, Perenna claims it is able to “offer borrowers an amount that they can actually afford, which is typically more than other mortgage products which have a reversion rate after a short initial fixation period”. For example, a consumer with a budget of £1500 a month, looking for 90% LTV on a 30 year term on average UK rates1 would find that Perenna could lend them £44,441 more than traditional lenders. Perenna would be able to lend £231,031, as opposed to the £186,590 from other lenders.

The calculator can be accessed on Perenna’s intermediary site.

Colin Bell, Perenna’s co-founder and chief operating officer, said: “This calculator is an important next step in our ongoing efforts to educate the industry on the impact different types of mortgage products have on affordability. Not only do longer term fixed rate mortgages take the burden of interest rate risk away from the consumer, they also give an affordability boost which could make the difference between a one or two-bed, a leasehold or freehold, or getting onto the first rung of the housing ladder.

“It’s there to help brokers see clearly the benefits of long-term fixed rate mortgages. And the product comes with short ERCs of only five years so clients have flexibility too.”