The Tipton & Cosley Building Society is claiming to be the first society to offer retirement interest only mortgages (RIO) with no end date or upper age limit throughout England and Wales.

The RIO mortgage range has been launched following the FCA’s recent changes to rules on lending to older borrowers.

The products offer older borrowers an interest only monthly payment until the borrower dies or moves into permanent long term care, at which point the mortgage is repaid.

Borrowers can use the sale of their home as their repayment strategy provided they have a minimum of 40% equity in their property. And if they wish to gift some equity to a family member, enjoy some holidays or give their home a face-lift with some home improvements, then up to 25% of the property value can be released for these purposes.

Available for both purchase and remortgage, Tipton’s RIO range is available to borrowers aged 55 and over who can meet the affordability assessments by demonstrating sustainable income in retirement.

There are initial three and five year fixed rate options available with rates of 3.38% and 3.58% respectively. Three and five year discounted variable options are also available with respective rates of 3.09% and 3.29%.

Product fees apply and up to 10% overpayments are allowed each year without charge. The maximum loan to value (LTV) is 60% with mortgages available up to £1 million. And for remortgages, both the standard legal fees and standard valuation on properties up to £400,000 are free of charge.

Cammy Amaira (pictured), the Tipton’s director of sales and marketing, said: “For many years now, older borrowers have seen their mortgage options dwindle so it’s encouraging to see the FCA acknowledge this.”

The Tipton has also announced that the upper age limit for standard lending has been removed.

Amaira added: “Later life borrowing is a growing market and we’re committed to supporting those who are approaching retirement or are already retired.

“In many cases, these types of borrowers have an established track record of maintaining payments and with retirement income guaranteed, could be perceived as lower risk lending.

“The launch of our RIO mortgage range coupled with removing the upper age limit for standard lending is the first step in developing a lifecycle of mortgage products aimed at building a long-term relationship with our members.”