Why Perenna can issue 95% LTV Mortgages

Getting on the property ladder in the United Kingdom is difficult. Having a suitable deposit and being able to borrow enough are challenges for many first-time buyers and home movers. At Perenna, our mission is to change that.

When we have secured our banking license, it’s our ambition to introduce 95% LTV (“Loan to Value”) mortgages with a fixed for life interest rate along with flexibility that puts you in control. This blog post explains what a 95% LTV mortgage is, why some lenders can’t offer high LTV mortgages, and why Perenna will be able to when we get to market.

What is a 95% LTV mortgage?

A 95% LTV mortgage is a loan where you take out a mortgage for 95% of a property’s value. This way you only pay a 5% deposit to buy a home. For example, to buy a house worth £300,000, you would only have to put down £15,000. The 95% LTV mortgage is generally attractive for first-time homebuyers who struggle to save for a deposit.

Why is there so little supply in the market?

The main reason lenders don’t offer high LTV mortgages is that they fear house prices will go down in the future. If you default and the house price falls below the loan amount, the lender cannot recoup the loan by selling the house and thus loses money.

How can Perenna offer 95% mortgages?

To offer 95% mortgages, lenders must ensure that you can repay the mortgage. At Perenna, we do that through a strong focus on affordability and by offering fixed for life mortgages.

Fixed for Life mortgages are mortgages where you pay the same amount for the entire term of the mortgage. Making it easier for you to budget payments and reducing the risk of default.