The Leeds Building Society is offering the first Retirement Interest Only (RIO) mortgages with cashback and no product fee.
The new RIO mortgages with £500 cashback and no product fee are:
- 3.94% two year fixed rate, with a discounted rate for the following three years
- 3.99% five year fixed rate
- 4.24% 10 year fixed rate
Each is available up to 55% LTV (loan to value) and comes with a free standard valuation.
The Leeds was the first to market with five, 10 and 15-year fixed rate RIOs, as well as cashback deals and improved criteria such as allowing the use of income drawdown pensions and SIPPs when assessing affordability.
“Retirement Interest Only is still new and very much a developing market since coming into existence last year,” said Matt Bartle, director of products at the Leeds Building Society.
“For that reason we continue to refine and build on our proposition as we learn more about the needs of this group of borrowers.
“We did a lot of research before we began this type of later life lending but the market was totally untested so remaining responsive to feedback is really important to us in shaping our range as demand continues to grow.
“Cashback is favoured by borrowers with smaller home loans so we’re now launching fee-free options to give borrowers even more choice.”
The Leeds accepts RIO applications from borrowers aged between 55 and 80 and its range includes fixed rate deals for two, five, 10 and 15 years, with a choice of fee and incentive combinations, including cashback.