Perenna has opened up its flexible long-term fixed rate product, known as the Perenna Mortgage, to new purchase customers and first-time buyers, within its pilot with L&C Mortgages.

Perenna will lend up to 95% LTV and for fixed-rate terms up to 40 years, helping borrowers lower their monthly payment amount. Perenna will also lend up to six times a borrowers’ income, subject to criteria.

A longer fixed rate term allows borrowers a higher affordability boost compared to those on a short-term fixed rate mortgage. This is because of the way current mortgage products are designed which place all the market risk on borrowers. Once this is removed, through fixing the rate for the entire term, first time buyers could borrow more.

For example, on a £60k joint income, a first-time buyer could borrow up to £355k with Perenna, which is about £70k more than the closest high street lender, it claims. As a result, borrowers looking to maximise their borrowing responsibly should consider a longer-term fix compared to a shorter-term fix like a two-year or five-year fixed rate mortgage, Perenna says.

The product also only carries declining early repayment charges (ERCs) for the first five years.

Colin Bell, COO of Perenna, said: “We’re really excited to open up the Perenna Mortgage to first time buyers and new purchase customers. FTBs are constantly struggling to get onto the housing ladder due to affordability issues – whether that’s saving up enough for a small deposit or being able to borrow enough to afford a home they really want. The Perenna Mortgage is the complete mortgage product – increased affordability combined with long-term stability and flexibility.”

Arjan Verbeek, CEO of Perenna, added: “We believe in unlocking the power of homeownership without having to sacrifice the amount you can borrow – borrowers should be able to have both their cake and eat it. As we remove market risk from borrowers, customers can borrow what they actually can afford, which in some cases can be on average up to 30% higher than the high street lenders.

“With our full unrestricted UK banking license and recent funding round, we are ready to deliver the much-needed changes in the UK mortgage market, and start delivering better outcomes for homeowners across the country.”