The only mortgage you'll ever need, with Arjan Verbeek (Perenna Bank)

How to Lend Money to Strangers

Brendan le Grange

Credit, Fintech, Management, Lending, Banking, Business, Careers

5 • 2.6K Ratings

🗓️ 15 February 2024

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

"It's important that in every interest rate environment, in every market environment, an average family can afford an average home" - Arjan Verbeek, co-founder at Perenna Bank.

The UK mortgage market has long been underpinned by the belief that, as long as the music kept playing, you would be able to refinance from one lender's short-term teaser rate to the next, without ever having to pay the full price... but then the music stopped and UK borrowers found themselves saddled with fast-rising standard variable rates. Household budgets were torn to shreds, and all while inflation ran rampant on the High Street, too.

Few escaped. And perhaps fewer still realised that variable rates were the reason they'd been unable to qualify for a mortgage in the first place. Variable rates can, of course, vary, and so, not wanting to carry the risk for this, lenders build a buffer to protect themselves through both a regulatory stress-test applied to affordability calculation and a significant down payment requirement. In a world where we all have to stretch ourselves incredibly thin to afford a house, that can be the difference between renting again and owning.

If only there was another way... like, say, the way they've been doing it in Denmark for the last two hundred years! In today's episode, I'm speaking to Arjan Verbeek, co-founder and CEO at Perenna Bank and vocal proponent of fixed-price long-term mortgages in the UK.

Perenna Bank is over at: https://perenna.com/

They're also on LinkedIn at https://www.linkedin.com/company/perenna/

As is Arjan himself, who is well worth the follow: https://www.linkedin.com/in/%F0%9F%87%B3%F0%9F%87%B1-arjan-verbeek-5884681/

And while you're there, find and connect with me at https://www.linkedin.com/in/brendanlegrange

Meanwhile, my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is discussed at https://confirmu.com/ and on episode 24 of this show https://www.howtolendmoneytostrangers.show/episodes/episode-24

If you have any feedback or questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.

Keep well, Brendan

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Transcript

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0:00.0	What do you get when you mix bicycle helmets?
0:04.0	Langerie?
0:06.0	Hmm?
0:08.0	And vegan ice cream.
0:10.0	Well, workspace, actually. With 4,000 of London's most original businesses already calling
0:20.5	workspace home, whatever it is you do, there's a space for you here.
0:25.0	It all happens at workspace.
0:28.0	Search workspace.co. UK. It's a market with significant risks that are all put on the borrower.
0:37.0	Making a decision to buy a house is an easy one because most people want to own
0:41.0	to own a home, but nobody has the money just to buy one.
0:44.0	People need to borrow a lot of money.
0:47.0	But if you look at before the financial crisis, the mortgage products haven't changed since then.
0:51.0	You know, if you change your product into a long
0:53.9	dated fixed you protect the borrower you can lend the higher amount they need less of
0:59.8	a deposit. Everybody needs a home otherwise you store up issues for the future. The
1:05.0	deposit, everybody needs a home, otherwise you store up issues for the future. So this is why we said, hold on, let's make that happen.
1:09.0	The snowball has started to roll and the benefits are clear.
1:15.0	When interest rates exploded late in 2021,
1:20.0	almost every British homeowner felt the pain. And by passing it on to their tenants most renters too.
1:27.0	You see the monthly mortgage payment for a typical house could easily have gone from 1,300 pounds to 1,800 pounds in the space of a year.
1:37.0	While everything else was getting more expensive too, and the faster those other prices rose, the faster rates rose, causing an escalating cycle of pain
1:45.8	for households who had, from their side, been doing nothing different.
	...

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