With high interest rates and stricter mortgage affordability rules, it is becoming a daily battle for mortgage lenders to encourage new borrowers. What is the incentive to choose a specific lender and product aside from who has the best rate in the bunch? Fortunately, many mortgage lenders actually do offer incentives for potential borrowers. A little bit extra added on to the deal to make it a bit more worth while. In this blog, we are going to be speaking about mortgage cashback. A cashback mortgage is a specific type of mortgage product where the lender provides a cash lump sum upon completion of the mortgage. This cash can be used at your discretion, whether to cover moving expenses, furnish your new home, or offset other costs associated with purchasing or remortgaging a property, such as legal fees.
When Do You Receive the Mortgage Cashback?
Typically, the cashback is paid to your solicitor on the day your mortgage is finalised. The solicitor then transfers the funds to you. For instance, NatWest specifies that the cashback is sent to your solicitor on the day your mortgage is drawn down.
General Terms and Conditions
The specifics of cashback offers can vary between lenders, but common terms include:
- Eligibility: Some offers are exclusive to first-time buyers, while others are available to all homebuyers or those remortgaging.
- Cashback Amount: This can range from a few hundred to several thousand pounds, depending on the lender and the mortgage product.
- Payment Timing: As mentioned, funds are usually disbursed upon mortgage completion.
- Additional Fees: Be aware of any arrangement or booking fees that might offset the benefit of the cashback.
- Early Repayment Charges: Some cashback mortgages may have penalties if you repay the mortgage early.
Cashback Mortgage Offers
Here’s an overview of cashback offers from major UK lenders. These are subject to change are you should always discuss the current available offers with your mortgage advisor:
Nationwide Cashback Mortgage
Nationwide offers £500 cashback to first-time buyers upon mortgage completion. For remortgages, they provide £500 cashback unless you opt for their free standard legal fees option. The cashback is paid within one month of completion.
HSBC Cashback On Mortgages
HSBC has introduced the Energy Efficient Homes Cashback, providing £500 cashback for purchasing or remortgaging a property with an Energy Performance Certificate (EPC) rating of A or B.
Halifax Mortgage Cashback
Halifax offers a unique 18-month fixed-rate mortgage with rates starting from 4.37% for borrowers with a 40% deposit. This deal includes £250 cashback, providing flexibility for those anticipating lower rates in the near future.
Santander Mortgage Cashback
While specific current offers from Santander are not detailed in the provided sources, they have historically provided competitive cashback deals. It’s advisable to check their official website or consult with a mortgage advisor for the latest information.
Barclays Cashback On Mortgages
Barclays has previously offered cashback incentives on certain mortgage products. For the most up-to-date offers, visiting their official website or speaking with a Barclays mortgage advisor is recommended.
Considerations When Choosing a Cashback Mortgage
- Interest Rates: Ensure that the mortgage’s interest rate is competitive, as a higher rate could outweigh the benefits of the cashback.
- Fees: Be mindful of any associated fees that might reduce the net benefit of the cashback.
- Flexibility: Consider the terms regarding overpayments and early repayments.
- Eligibility Criteria: Some cashback offers may have specific requirements, such as being a first-time buyer or purchasing an energy-efficient home.
Speak To A Mortgage Advisor
Cashback mortgages can provide a helpful financial boost during the home-buying or remortgaging process. However, it’s essential to assess the overall mortgage terms to ensure they align with your financial goals and circumstances. Consulting with a mortgage advisor can really help with this. Call or email our team today to see how we can help.
