Newbury Building Society has launched its first retirement interest-only mortgage for borrowers aged 60 and over.
The product has a five-year discount of 1 per cent to a variable rate of 3.45 per cent and is available at 50 per cent loan-to-value.
It is available to new and existing mortgage customers.
To be eligible for the variable mortgage product, applicants must be a minimum age of 60-years-old, retired and in receipt of their pension.
Roger Knight, lending manager at Newbury Building Society, said: "People are living for longer and therefore, as a lender, it is our responsibility to ensure we are offering the right products at the right time.
"We hope our RIO five-year discount variable mortgage product ticks all the correct boxes and enables borrowers to fulfil their retirement ambition."
The Financial Conduct Authority gave the green light for RIOs in March 2018, when it redefined them as standard mortgages.
Lenders including Bath and Vernon Building Societies have already launched new products in this category.
Jay Rooney, practice principal at One and All Financial in Manchester, said the latest launch was a welcome addition to a market that had recently begun to grow.
Mr Rooney said: "It is useful for two sets of people: those whose (mostly) high street lenders expect them to pay off an existing interest-only mortgage within six weeks once they get to their mid-sixties and those considering equity-release.”
He said for those who already had a debt-free property, this product could allow them to take out capital without running up significant interest under an equity-release strategy.
He added: "It would be nice to see high street lenders launching similar products."
Newbury has recently raised its upper borrowing age limit to 90 years, across its entire range.
Mr Rooney praised this move and suggested it should be matched by banks and other providers.
Newbury is offering a free standard mortgage valuation for properties valued up to £1m, charges no legal fees for remortgages, and accepts mortgage overpayments.
