Beverley Building Society has become the latest lender to launch a retirement interest-only mortgage.
The new mortgage is available to borrowers aged over 55 who are receiving a pension income, with no maximum age or loan term.
The product is a three-year discount variable rate at 2.99 per cent, which is available up to a maximum of 55 per cent loan-to-value.
After the three-year term the product reverts to the lender’s SVR which is currently 4.99 per cent.
It comes with a £495 for applicants with a Lasting Power of Attorney in place, or £795 for those without.
Beverley head of lending Graham Carter says: “RIO is a natural extension to our existing later life lending offering, which is proving to be very popular given current market demand from older borrowers.
“Since the introduction of the new pension freedoms, we think our RIO mortgage offers people an affordable way of unlocking some equity from their home without interest rolling up and increasing the capital debt over the term of the loan.
He adds: “It is a cost-effective way of accessing cash which can be used to either top up retirement income, gift a deposit to a younger family member as part of their legacy planning, raise capital for a specific purchase or simply having a nest egg of cash for that rainy day.”