Leeds Building Society RIO - Fixed 5 Year
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Leeds Building Society RIO - Fixed 5 Year Scheme Review
RIO – Fixed 5 Year Key Details
- Free Valuation
- 10% Yearly Capital Repayments
- Interest-Only Mortgage
- Maximum LTV – 55%
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Or is it?
Is the Leeds Building Society RIO - Fixed 5 Year, equity release scheme the best?
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Luckily, we’re here to guide you on the ins and outs of equity release, as you deserve only the best.
However, it’s important to remember that not all plans are suited to each individual. You need to look for one that will serve your home, your lifestyle, and the reason why you’re considering equity release in the first place.
As leading experts in the field, we’ve delved into hours of research, unpacked all the equity release plans on the market (we’ve reviewed over 250 schemes!), and discovered the best in the business.
Let’s find out!
Who Are Leeds Building Society?
Leeds Building Society, the UK’s 5th largest building society, offers a range of mortgage products to cater for individual retirement or saving needs.
Originally formed as a mutual, Leeds Building Society has helped UK communities save & borrow since 1845. In 1875 it formally established as the Leeds and Holbeck (Permanent) Building Society, offering both deposit accounts and mortgages, and in 2005 changed its name to Leeds Building Society.
In 2018 Leeds Building Society was the 1st national high street lender to launch a range of Retirement Interest Only (RIO) mortgages.
Aimed at older homeowners, RIO mortgages are interest only mortgages with no set end date. Specifically designed to allow homeowners to use the sale of their home to repay their mortgage balance. This can either be upon death, or when the last surviving partner moves into care.
Unlike an equity release lifetime mortgage, interest roll-up is not permitted on the Leeds RIO mortgage.
The Homeowner will be required to make monthly mortgage payments for the life of the mortgage, which will consist only of interest on the amount borrowed.
Eligibility & Requirements
Leeds Building Society’s RIO mortgages are accessible to borrowers aged 55 to 80 at the time of application. Joint applications are permitted if both candidates fulfill the age and income requirements.
These mortgages can be used to acquire or refinance a borrower’s primary house. Capital raising is authorized for both property and non-property related reasons.
These mortgages are only accessible in the form of interest-only payments. The mortgage amount is often recovered through the sale of the mortgaged property, either upon death or when the last living spouse enters care.
The maximum loan-to-value (LTV) is 55% of the property worth, with a loan size of £1,250,000.
There is no requirement for a certain level of income. To evaluate the lifetime affordability of the interest-only payments, the Society will conduct a comprehensive study of income and spending.
There is no minimum equity requirement, and the minimum property valuation is £50,000. The property must be the primary residence of the homeowner and must be located in England, Scotland, Wales, or Northern Ireland.
Adverse credit, such as arrears, defaults, and CCJs, may be acceptable depending on the amount, duration, and degree of credit registered. To verify your eligibility, please call the team.
These Retirement Interest Only mortgages offer a tax-free lump sum cash release that may be used right away. You will be expected to make monthly mortgage payments for the duration of the loan, which will only consist of interest on the amount borrowed.
It is important to highlight that, in contrast to an equity release lifetime mortgage, interest roll-up is not authorized. This also implies that, unlike equity release lifelong mortgages, Leeds RIO mortgages do not come with a no-negative-equity guarantee.
The ability to make monthly mortgage payments may be jeopardized if income falls, outgoings rise, or interest rates rise. This implies that if the homeowner fails to make payments on time, their home may be in jeopardy.
There is no maximum term or age limit for repaying the mortgage. It will endure as long as the last surviving homeowner and/or the last homeowner dwelling in the property.
There is no requirement for any type of payback strategy, such as endowment, investment, or repayment basis, because the loan will be returned with the profits of the property’s sale.
Tapered early repayment costs (ERCs) apply throughout the duration of the fixed product term, starting at 6% in this case of the 15-year fixed and reducing to 2% in the 15th year.
The homeowner is responsible for making all monthly interest payments as they become due until the RIO mortgage is paid off. If homeowners do not make their RIO payments on time, their homes may be in jeopardy.
If a single applicant dies, the mortgage must still be repaid, generally through the sale of the home. On joint applications, the mortgage will be continued in the survivor’s name.
In addition to the monthly interest-only payment, Leeds Building Society will allow an additional 10% capital payback without penalty each year.
The mortgage is transferable and can be transferred to a different property if certain conditions are met.
Within the Leeds RIO mortgage product range, there is typically an option of fixed rates. They are, however, subject to change, so call the team for the most up-to-date interest rates.
Unless another product is selected before or at the conclusion of the fixed rate term, the mortgage will revert to the lender’s standard variable rate (SVR).
Please call the team on Freephone – 0800 802 1051 today for more information or to obtain an estimate on the Society’s RIO mortgage.
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