Cashback

Advantages to Cash Back mortgages
The only advantage to a Cash Back mortgage is the obvious one of the lump sum of money that it gives you at the start of the mortgage.

For house buyers and especially first time buyers there are any number of reasons why extra cash can be useful. Renovations to the new property may be required or extensive decoration may be needed before the place feels like home. At the very least it’s probable that a new property will need some new furniture or curtains all of which means money that has to be found.

Buyers who have been saving hard for a deposit may find budgets a little tight during the first few months of their mortgage. For those borrowers the opportunity to access some cash can be very attractive.

Added Bonus Vs Possible Higher Rates
In a situation where two mortgages were absolutely identical in every single aspect other than the fact that one offered a Cash Back incentive then it would certainly be an added bonus and it would make the Cash Back mortgage a stronger deal but it is highly unlikely that such an event would occur. The rates available to Cash Back mortgages are usually higher.

It’s possible that one mortgage lender will try to differentiate their mortgage from another lender’s similar product by using a Cash Back promotion but on closer inspection there will almost certainly be subtle differences in the offerings. Whether those differences matter to the borrower or not is up to the borrower to decide.

For some borrowers the very fact that there is a Cash Back offer on a particular mortgage product may make it easier to make their choice as the feature that drives their final decision. The possibility of a Cash Back offer in isolation should almost certainly not be a strong enough reason to choose a mortgage for most home buyers.