The Leeds Building Society has unveiled a 15-year fixed rate mortgage, the longest in the Retirement Interest Only (RIO) sector.
The mutual says the move follows strong demand from later life borrowers for longer term fixed rates.
The Leeds was the first provider to introduce five and 10 year fixed rate RIO mortgages, as well as RIO deals with cashback.
It accepts RIO applications from borrowers aged between 55 and 80 and its range includes fixed rate deals for two, five or 10 years (with 15 year fixed rate from 30 July), with a choice of fee and incentive combinations, including cashback.
Each RIO mortgage is available for purchase or remortgage applications, has no product fee and no maximum term.
Matt Bartle, the Leeds Building Society’s director of products, said the past 12 months had exceeded performance expectations he and his team had set for what was an untested sector.
He added: “While Retirement Interest Only was a completely new market, guidance from the regulator and our own extensive research led us to expect strong demand.
“Bearing in mind the UK’s demographic and the changes to how people are managing their financial commitments during later life, we anticipate the demand for Retirement Interest Only will carry on increasing as older borrowers seek greater choice, alongside more established options such as equity release and lifetime mortgages.
“The last 12 months bears this out and we’ll keep our product offering and lending criteria under review so we can support more borrowers wanting to make use of this type of home loan.
“As a mortgage lender for more than 140 years, we’ll use our expertise and experience to carry on meeting the needs of more borrowers to enable them to have the home they want.”