What is a Cash Back Mortgage?
A cashback mortgage involves the lender giving the borrower a sum of money or other financial benefit upon completion of the mortgage or at a later time. This money can be used by the borrower to cover some property purchase expenses like legal fees, stamp duty, home improvements etc.
It's important to note that cashback mortgages often come with higher interest rates compared to other mortgage options. Additionally, there may be extra fees in the long term that could outweigh the cashback received. If a cashback mortgage is repaid early, the lender may require the borrower to repay all or part of the cashback, along with applying an early repayment charge (ERC).
This is where our advisers can add value by working out a mortgage that would be cheaper for you in the long run.
Lender requirements
The cashback amount that the borrower receives is determined by the lender's criteria. It may be calculated as a percentage of the total mortgage amount or it could be a set sum. Some lenders may require the borrower to have or open a current account with them in order to be eligible for cashback.
