Check eligibility for a mortgage
- Help finding the best mortgage for you
- Support through the whole process
- The UK's largest fee-free broker
- Compare deals from over 90 lenders
The bonus of a cash payment from your mortgage provider could certainly prove appealing, especially when you consider all the one-off costs associated with buying a house.
However, it’s common that cashback incentives are only used in an attempt to mask uncompetitive deals.
It’s transferred into your bank account as soon as your mortgage deal is finalised. There are no limitations on how the money can be spent, and it’s not taxable.
Nevertheless, it’s still recommended to weigh up the overall cost of the mortgage during the introductory period.
If you’re comparing two-year fixed rate mortgages, this calculation will help you.
Mortgage fees + 24 monthly payments – cashback = overall cost
For a five-year fixed-rate mortgage, it’s:
Mortgage fees + 60 monthly payments – cashback = overall cost
These calculations assume you’re planning to remortgage before being switched to the lender’s standard variable rate (SVR). Often, there will be deals available with lower interest rates and lower fees that’ll save you more money, even when the cashback is considered.
In 2018, there were mortgages available offering up to £1,500 cashback. Several providers were offering £1,000 cashback, while many more were offering £500 cashback.
It’s common that the best cashback deals are only available on mortgages with a lower loan-to-value.
It’s common for homebuyers to be short of money as soon as their mortgage is finalised. However, it’s rarely worth choosing an inferior mortgage to fix this problem.
There are a couple of government products that were designed to help financially struggling first-time buyers onto the property ladder quicker.
There are several terms associated with these products, which you’ll need to understand before applying. Nevertheless, by taking advantage of them, you may have more cash spare to fund the other costs associated with buying a house.
Cashback mortgages appeal to the widespread desire for extra cash in the weeks after completing your mortgage. However, getting your hands on this bonus often comes at the cost of a superior mortgage deal.
Usually, this bonus only serves as a carrot on a stick, designed to sway people with poor knowledge of the mortgage market.
Always calculate the overall cost of a mortgage before making a decision on the most suitable deal for you.
If you have to wait a couple of extra months to save for the additional costs of buying a home, it’s likely to be worth doing so. A professional mortgage adviser can help you find the best deal that you’re likely to be approved for.
finder.com is an independent comparison platform and information service that aims to provide you with the tools you need to make better decisions. While we are independent, the offers that appear on this site are from companies from which finder.com receives compensation. We may receive compensation from our partners for placement of their products or services. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn't influence our assessment of those products. Please don't interpret the order in which products appear on our Site as any endorsement or recommendation from us. finder.com compares a wide range of products, providers and services but we don't provide information on all available products, providers or services. Please appreciate that there may be other options available to you than the products, providers or services covered by our service.