Cashback Mortgages explained - Apply for a Cashback Mortgage

If you want to find a mortgage which provides a lump sum of cash at the start of your mortgage term – choose a cash back mortgage. Cash back mortgages generally offer an amount of cash based on a percentage of the mortgage, which usually ranges from 1% to 10%. For example, if you find a mortgage for £100,000 and you agree on a 4% cash back scheme, you would be eligible to £4,000 once your home purchase has been completed.

What is a Cash Back mortgage?

A cash back mortgage pays out a lump sum of cash to the borrower on the completion of the mortgage. Cash back can be a per cent of the new mortgage value in a variable rate mortgage, paid in cash to the borrow, or it can be a smaller amount offered with a fixed-rate mortgage that can go towards the costs of selling or buying a property and the fees associated with it.

Fixed sum cash back deals, which are not based on a mortgage percentage can also be negotiated and are normally for a lump sum between £100 to £1000, depending on your mortgage lender’s policy.

Benefits of Cashback Mortgages

If you find a mortgage which allows for a cash back sum, then the one off payment could help pay for related costs such as estate agents, removals and solicitors. The idea of getting money back is extremely attractive, especially if it helps cover some of the costs associated with buying a property.

Apply for a Cashback Mortgage

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Apply for a Cashback Mortgage

Things to Consider With Cash Back Mortgages

Some of the fees include a booking or arrangement fee at the start. Early repayment charges may also be applied, which could include repayment of the lump sum at the same time as the charge. In addition, if you opt for a large cash sum, the interest rate may not be very competitive and could fluctuate greatly.

Property Advice Blog Tip!

Before you find a mortgage with a cash back policy, check out the interest rates and related costs and get some solid property advice on current cash back mortgages and their trends.

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