Cashback mortgages involve the mortgage provider paying a lump sum to you the borrower at the completion of your mortgage term, either as a set amount or as a percentage of the amount paid.
Who should consider a Cash Back Mortgage
Like all mortgage options the Cash Back mortgage will be more suited to some borrowers than others. Cash Back is usually aimed at first time buyers and sometimes included in a package of first time buyer incentives such as help with survey charges or legal fees.
At a time when out-goings are high and access to ready cash may not be easy the Cash Back mortgage provides an option. There are no restrictions on what the money paid in a Cash Back deal can be used for and so buyers who want to buy furnishings or decoration have that option.
No mortgage choice is ever completely straight forward and it will always depend on personal circumstances and preferences. One personís financial requirements will not necessarily be shared by another borrower and the advantages of a lump sum at the beginning of a mortgage will be more attractive to some then others. Some may not need it and wonít want to limit their choice by tying themselves to that option.
Most Lenders Offer Cash Back
Cash Back mortgages are easy to find in the market, with most major lenders offering a Cash Back option although they will limit the ability of the borrower to take advantage of competitive rates.
Any borrower thinking of taking out a Cash Back mortgage should fully investigate the fees and penalty clauses attached to the mortgage before they commit. They should also calculate whether getting cash from another source along with a lower rate non-Cash Back mortgage will be substantially cheaper for them in the long run.
With these elements taken into consideration the Cash Back mortgage still remains a popular type of mortgage offering and most lenders will provide a Cash Back mortgage especially on their standard Variable Rate mortgage. In general the Cash Back mortgage wonít offer the best rates on the market but there may be some borrowers for whom the access to the up-front cash rather than a long term pay-off will be the most attractive element of a mortgage.