The Nottingham is the latest in a string of lenders to add retirement interest only (RIO) mortgages to its products.
Three RIO mortgages have been added to the lender’s range, including a seven-year fixed at 3.85 per cent, three-year fixed at 3.34 per cent and a two-year discounted at 2.99 per cent.
The three products, available for purchases and remortgages, have a 40 per cent loan to value (LTV) limit and a £995 arrangement fee.
Nikki Warren-Dean, head of intermediary sales for The Nottingham for Intermediaries, said: "The addition of RIO mortgages to our portfolio adds choice for people in, or heading towards, retirement.
"As with all The Nottingham for Intermediaries products, RIO mortgages are provided exclusively via our broker network so we have every confidence they will be supplied with expert advice and support to ensure it’s the right fit for the customer."
Mortgages designed for those looking to borrow in later life have become increasingly popular. So far in February, a number of lenders have brought similar products to the market.
Saffron Building Society launched the ‘Lending into Retirement Downsizing’ mortgage, which offers a three-year discount rate at 2.94 per cent on a 60 per cent loan to value. It has a £999 arrangement fee and carries an early repayment charge of 2 per cent for three years.
Similarly, Newbury Building Society’s RIO product offered 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. This mortgage is available to those aged 60 and over.
Meanwhile, Leeds Building Society introduced two 10-year RIO mortgages, including a 3.99 per cent fixed rate available at up to 55 per cent loan to value (LTV) and 4.09 per cent fixed rate at up to 55 per cent LTV with a £500 cashback.
In addition, Leeds BS launched a no fee fixed rate RIO mortgage. The five-year product comes at a fixed rate of 3.83 per cent and is available up to 55 per cent LTV.
In a recent survey conducted by The Nottingham into how retirees over 50 would use the money released from a property, 39 per cent said they planned to spend rather than save it.
More than 35 per cent of the 1,025 people questioned said they holidayed three times a year and 39 per cent cited their retirement years as the best time of their lives.
Ms Warren-Dean said: "Our research shows many people want to use their money to enjoy their retirement rather than having large amounts of capital tied up in their property. RIO mortgages can help, so we wanted them to be available to customers."
Danny Belton, head of lender relationships at Legal & General Mortgage Club, added: "The building society sector is playing a major role in helping both the first time buyer and the older borrower.
"It’s great to see The Nottingham recognise the need for improved criteria and innovation for older borrowers with their new RIO mortgage range. As their research suggests, many customers will look to raise funds to help them enjoy their retirement."
