"Having asked brokers, many of their customers want to be able to enjoy travel, develop their home or help younger family members to buy a house of their own"
The three-year discounted rate is available at 3.34% with a Power of Attorney in place or 3.64% without, up to 50% LTV.
The product comes with a £999 arrangement fee and allows 20% penalty-free overpayments per year.
Anita Arch, head of mortgage sales at Saffron Building Society, said: “In an ongoing commitment Saffron continually looks to develop flexible ways to help homeowners plan their financial future. We proactively bring to market new products like the RIO mortgage to meet the demand.
"Retirement today looks and feels very different from how people viewed it in the past. Having asked brokers, many of their customers want to be able to enjoy travel, develop their home or help younger family members to buy a house of their own for instance. They want to be able to do this whilst protecting equity in their home.
"Utilising the capital linked to homeownership has become a popular way of financing people’s lifestyle in retirement. Our new RIO mortgage is a great way to do this.”
Danny Belton, head of lender relationships at Legal & General Mortgage Club, added: “Saffron Building Society sets the bar high for other lenders to follow suit. With a growing number of people borrowing into retirement, it is positive to see Saffron cater to the needs, hopes and dreams of today’s retirees, providing them with greater choice and flexibility.”
