The Mansfield Building Society has unveiled a new mortgage product for interest only customers who are approaching retirement or who are already retired.

Available exclusively through mortgage intermediaries, it allows an interest only mortgage to be taken out up to age 80 where the repayment strategy is to be downsizing. Borrowing for home improvements and for personal use is also available.

The new interest only product has the following features:

• Discounted rate of 3.19% (2.40% below SVR for two years)
• Up to 40% LTV
• Available for purchase or remortgage
• Application fee £199 and Completion fee of £800
• Early Repayment Charge of 2% for two years
• Mortgage to be repaid before age 80

To qualify for the downsizing option there must be a minimum equity of £150,000 and this must be sufficient to provide a “reasonable quality” home in the property locality.

The Mansfield also has an existing product that allows a mortgage term up to age 80 on a capital repayment or an interest only basis with a mainstream repayment strategy.

Stuart Bryce, business development manager at the Mansfield, said: “I am confident that advisers will see this as an attractive option to meet the clear needs of an underserved segment of the mortgage market. It is only available through intermediaries because it requires a full understanding of a client’s current and future circumstances, including their plans for later life, and professional advisers are well placed to provide this advice.

“With the spotlight very much on different strategies to help clients steer the right financial course at a significant point in their lives, the Mansfield is proud to offer a commonsense alternative. Our underwriting expertise allows us to make informed individual assessments of customers’ circumstances and recognise mortgage affordability based on their current and future incomes.”