Elevate is a bespoke financial adviser in Greater London. We have offices in Beckenham and Bromley and offer a range of mortgage advice. Our team provides tailored mortgage advice services for various mortgage types, including cashback mortgages.
WHAT IS A CASHBACK MORTGAGE, AND HOW DOES IT WORK?
A cashback mortgage is when a mortgage lender offers customers a financial incentive to take out a mortgage with them, i.e., cashback.
They will either provide the client with a fixed amount of money (e.g., £500) or a percentage of the property valuation (e.g., 0.5%), either at the start of the agreement, during the mortgage or when the mortgage is repaid. This money is typically paid into a current account, which the customer will need to open with the same bank.
If the cashback is paid to the mortgage customer once the mortgage is fully repaid, then if you fail to pay back the mortgage or remortgage to a different lender, you will not receive the cashback. If the cashback is paid out earlier, you might need to pay it back if you remortgage.
Most cashback mortgages use a standard variable rate of interest, but not exclusively.
If you are confused about cashback mortgages or are unsure if they are right for you, why not speak to one of our friendly mortgage advisers? Let’s chat with no obligations!
WHAT ARE THE PROS AND CONS OF A CASHBACK MORTGAGE?
The main benefit of a cashback mortgage is that it comes with a financial reward. If given at the start of the agreement, this can help cover initial costs like valuations, legal fees, and Stamp Duty tax.
One disadvantage of a cashback mortgage is that the cashback usually has to be paid back if you switch mortgages. Another disadvantage is that you may be subject to a higher interest rate throughout the mortgage term.
The exact terms of a cashback mortgage can differ significantly.
HOW TO QUALIFY FOR A CASHBACK MORTGAGE?
To qualify for a cashback mortgage, you must meet the same eligibility criteria as a standard mortgage. This includes having a good credit score and being able to afford the repayments based on your income.
Additionally, you may need to meet the specific requirements set by the lender offering the cashback mortgage. Some lenders may require you to open a current account with them, while others may have minimum mortgage amounts.
It's important to note that cashback mortgages may not be available to everyone. For example, some lenders may only offer cashback mortgages to first-time buyers, while others may restrict eligibility to certain types of properties.
CASHBACK MORTGAGES FAQS
What are the conditions of a cashback mortgage?
The main condition associated with a cashback mortgage is that the mortgage must be repaid in full, or you will have to repay the cashback. Some other conditions may apply, such as the cashback must be paid into one of the same lender’s current accounts.
Are cashback mortgages suitable for everyone?
Most people can qualify for a cashback mortgage, especially if they are willing to open a current account with the same lender. However, you should consider the amount of cashback you will receive against other mortgage offers with cheaper interest rates. You may want to consider if you are likely to remortgage and will miss out on or need to repay the cashback.
Is a cashback mortgage right for me?
Cashback mortgages can be an attractive option for those looking to reduce the upfront costs of buying a property. However, they may not be the best option for everyone; you need to consider all the aspects discussed here and talk to an adviser for more detail.
What’s the typical amount of cashback you can get?
Most cashback mortgages offer a fixed sum between £200 and £500. Some deals will offer a small percentage of your property value, but these are not as common or as widely available.
WHY USE AN ADVISER TO FIND A CASHBACK MORTGAGE?
It can be difficult to calculate if a cashback mortgage is more advantageous than other types of mortgages. If you need help weighing up your mortgage options, a mortgage adviser can provide clarity and make the process less stressful.
CONTACT US FOR MORTGAGE ADVICE
Cashback mortgages can be a great way to save money on upfront costs when buying a property. However, it's important to carefully consider the terms and conditions of the mortgage before deciding.
If you're interested in a cashback mortgage or would like to explore other mortgage options, Elevate's team of expert mortgage advisers are here to help. With offices in Beckenham and Bromley, we provide tailored mortgage advice to help you find the best mortgage for your needs. Contact us today to arrange a free consultation.
Our mortgage broker team is based in Bromley and Beckenham, and help client across London. If you’re looking help finding a cashback mortgage get in touch for friendly mortgage advice today.
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