Leeds Building Society has today launched a suite of retirement interest-only mortgages following the FCA’s decision to reclassify RIO loans as standard mortgages.
The building society boasts that it’s the first national high street lender to enter the new market, as well as being the first lender to “commit to rewarding brokers for retirement interest only product transfers.”
The mortgage range will initially only be available through brokers (who will be issued checklists and other forms of guidance) because “choosing a mortgage is always a highly personal decision and everyone’s individual circumstances and priorities are different, so it’s important consumers take the appropriate advice,” says Leeds Building Society director of product and distribution Jaedon Green.
In bringing the new mortgage range to market, the building society, says Green, feels that it has a “responsibility to get it right.”
“Our comprehensive approach to product and process development creates a framework, which protects the consumer while enabling the intermediary to advise with confidence.
“In doing so, we create a benchmark for other lenders looking to launch retirement interest only solutions,” he says.
L&C Mortgages associate director David Hollingworth adds: “Retirement interest only has the potential to offer older borrowers an alternative option to a traditional mortgage over a specified term or to lifetime mortgages. The regulator’s move to increase access to RIO recognises that older borrowers will have different requirements that could be better served from a wider range of options.
“The market needs a broader choice available to these borrowers and the launch of Leeds BS into this sector is an important step forwards.”
The RIO mortgages are available in two- three, and five-year fixed rate flavours for borrowers aged between 55 and 80.