Leeds extends Retirement Interest Only lending to direct customers
Older borrowers are being offered more mortgage choice as Leeds Building Society launches Retirement Interest Only lending direct to consumers.
The Society was the first national high street lender to enter this brand new market in July 2018 and has since continued to expand its product offering and refine and enhance lending criteria.
“We had a really positive reaction when we launched our Retirement Interest Only range last summer and the number of applications has steadily increased, rising month on month so far this year,” said Matt Bartle, Leeds Building Society’s Director of Products.
“It was always our intention to offer this type of mortgage direct to customers following the initial launch via intermediaries and we’ve listened carefully to feedback so we could continue to improve and develop our product range and lending criteria.
“In response to demand, we were the first lender to launch a 10 year fixed rate deal and now accept appropriate income drawdown plans and SIPPs when assessing affordability.
“We also introduced fee-free products, which would appeal particularly to the high proportion of borrowers seeking advances of less than £100,000.
“Our launch into Retirement Interest Only was underpinned by extensive research to give us more insight into later life lending.
“The consumer response so far has backed up our initial assessment that this was a growing but under-served market and we’ll remain responsive to borrower need to deliver on our mission to help more people have the home they want.”
The Society accepts Retirement Interest Only applications from borrowers aged between 55 and 80 and its current range includes fixed rate deals for two, five or 10 years, with a choice of fee and incentive combinations, including cashback.
Highlights from Leeds Building Society’s Retirement Interest Only range include:
- 3.34% two year fixed rate Retirement Interest Only mortgage, with no product fee
- 3.64% five year fixed rate Retirement Interest Only mortgage, with no product fee
- 4.19% 10 year fixed rate Retirement Interest Only mortgage, with no product fee
Each is available for purchase or remortgage applications, has no product fee and no maximum term.
Notes to Editors
Retirement Interest Only mortgages
The Financial Conduct Authority (FCA) introduced the first definition of what constitutes a Retirement Interest Only mortgage in 2018 and introduced specific regulations for this market.
A Retirement Interest Only mortgage will be repaid on a specified life event, which can include the sale of the property, moving into residential care, or the death of the borrower.
The regulations clarify the difference between Retirement Interest Only and lifetime mortgages – unlike a lifetime mortgage, the interest on a Retirement Interest Only mortgage cannot be rolled up so the borrower will have to demonstrate interest only repayments are affordable throughout the length of the loan.
For more details of Retirement Interest Only mortgages and how they compare to other later life lending, visit: http://www.leedsbuildingsociety.co.uk/mortgages/retirement-mortgages/
Leeds Building Society
Leeds Building Society won the title of Best Shared Ownership Mortgage Lender in the 2018 What Mortgage Awards, its third consecutive year of success in this category.
Leeds Building Society operates throughout the UK and in Gibraltar and has assets of £19.4bn at 31 December 2018 (£18.5bn at 31 December 2017). The Society’s head office has been based in the centre of Leeds since 1886.