Cashback Mortgages
With a cashback mortgage the lender pays you a lump sum of cash on completion of the new mortgage.
This lump sum or "cashback" can be a fixed amount e.g. £5,000, or a percentage of the amount you are borrowing e.g. 5%. Your cashback can be used for whatever you like, typically to buy furniture or for decorating your new home, and just covering all those extra moving home expenses such as the legal fees, stamp duty, the removal company and home insurance.
Cashback mortgages do therefore offer you a very useful up front bonus, and there are great deals to be found. But you must as ever do your figures and make comparisons. Typically a cashback mortgage will have a slightly higher interest rate, meaning you pay back what you gain over the long term. That isn't necesarily a bad thing of course - you could just think of the cashback as a cheap loan - and these mortgages are popular because of the easy start they give you. Just make sure you're not paying way over the odds by comparing cashback products with different companies.
NOTE: Please remember we are NOT financial advisors - everything here is just our opinion. Nothing here is investment or financial advice - please consult an independent financial advisor before acting on any information contained on this site.
