Cambridge Building Society has launched a Retirement Interest-Only (RIO) mortgage exclusively via its direct lending channel initially.
The Cambridge’s RIO product is offered at a 3.39% variable rate for the term of the mortgage, with a maximum loan-to-value (LTV) of 55% and free valuation fees.
Dan Barker, product manager at The Cambridge, said: “With an increase in the number of older households and rising house prices resulting in higher mortgage values, we recognise that there is a growing need in this segment for a mortgage to help those who would like to unlock the value in their property to fund their retirement or support their loved ones.”
The mortgage has a £500 fee, but this is not charged to existing Cambridge Building Society mortgage customers. There are also no early repayment charges.
It is aimed at supporting both existing borrowers looking for alternative borrowing at the end of their current term, as well as new customers looking to free up equity in their property.